Apostila Law 11 638

Law 11638 - A revolution in business accounting
Adriana Marques Dias

• • • • • • • • • • Master of Strategic Controlling and Accounting for UNIFECAP
- (2003) Post-graduate degree in Accounting by UFU Management (1991) Analysis an
d
Business administrator - at Centro Universitario Moura Lacerda (1986) Accounting
Professor in the City University of São Caetano do Sul, and Trevisan Business S
chool operates programs in the Graduate School of INPG Boituva and Manager of Tr
aining and Training Trevisan Outsourcing Consultant firms, Training and Business
Projects, Experience in Administration, with emphasis in Business Administratio
n. Speaker accredited by the CRC-SP
1
Law 11.638/07
Law No.
11638,, 28.12.2007
Published in the Official Gazette, 28.12.2007 - Special Edition
Syllabus
Amending and repealing provisions of Law No. 6404 of 15 the December 1976 and La
w No. 6385 of December 7, 1976, and extends to companies large provisions on the
preparation and dissemination of financial statements. Veto message
the
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Seite 1
Our Goal
• Contextualizing the impact of participating in the processes of Law 11,638 org
anizations
3
Our Agenda
• Objectives • Benefits Law the new Law • Line general conceptual orientation •
Changes • Main • Process changes to harmonize accounting and auditing • accounti
ng procedures from 2008
4
Objectives of the new law
• Commitment to Brazil to incorporate global harmonization (IASB) • Focus on the
accounting aspects of the current Corporations Law, covering developments and c
hanges required in these 30 years • Flexibility for future development - not rel
ying on new law changes • Freedom x tax accounting
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Seite 2
Benefits of this new law
• Alignment to IFRS (International Financial Reporting Standards) international
accounting standards adopted in over 100 countries. • Increased flow of foreign
and domestic investment for productive capital. • Transparency of business activ
ities. • Corporate Governance as a source inducer for competitiveness and develo
pment.
6
General line of orientation conceptual
- More principles-based and requiring professional judgment - The strengthening
of the conceptual analysis of risks and benefits with regard to legal ownership
- requires review and unification of our conceptual framework and principles of
accounting * CPC procedure has already issued the CFC has already set the standa
rd
7
Changes
• Law 6404/76 - Specifically, Article no. 176-179, 181-184, 187, 188, 197, 199.2
26 and 248 • • Law 6385/76 Article no. 10a
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Seite 3
Changes
• The main changes brought by the law can be classified in summary fashion, the
following groups:
- No set of financial statements required - Upon registration of commercial book
keeping - In the classification of accounts in the Balance Sheet - The Criteria
for the Evaluation of assets and liabilities, and - In the scope of companies su
bject to their adoption.
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Changes in the set of financial statements required
10
In all of the mandatory Financial Statements
Article 176 of Law 6404/76 - before Law 11 638
Article 176 of Law 6404/76 - after Law 11.638
Income Statement Balance Sheet Statement of Income for the Year Losses and State
ment of Changes in Financial
Balance Sheet Income Statement Statement of Financial Income and Losses * Statem
ent of Cash Flows Statement of Value Added ** ***
* CVM guides the presentation of accounts Statement of Changes in Shareholders'
Equity ** The closed companies with equity of less than U.S. $ 2,000,000 shall n
ot be required *** Required only for listed companies
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Seite 4
Degree of transparency of financial statements
DLPA - Statement of Profits and Losses
x DMPL - Statement of Changes in Equity Shareholders' equity is divided into cap
ital, capital reserves, asset valuation adjustments, retained earnings, treasury
stock and accumulated losses. It is expected degree of transparency of financia
l statements
12
The new statutory financial statements
• Statement of Cash Flows • Value Added Statement
13
The new statutory financial statements
• add more information about the performance of companies, • Approaching the acc
ounting concepts of financial and economic concepts • Facilitates understanding
of the figures
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Were created:
* The subgroup of the Intangible Fixed Assets;* The subgroup of Asset Valuation
Adjustments Equity.
15
Changed the method of accounting:
* Of the leases; • Research and Development • Awards with bonds and grants for i
nvestments.
16
Segregated:
* Losses; • Earnings within the Revenue Reserves;
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Balance Sheet Structure
BRAZILIAN COMPANY BALANCE SHEET AT 31 DECEMBER X2 E X1 IN THOUSANDS OF REAL
CURRENT ASSETS LONG TERM LIABILITIES CURRENT LIABILITIES LONG-TERM
Deferred Income
PERMANENT Investments: Fixed
SHAREHOLDERS 'EQUITY Share Capital Capital Reserves
- Finance Lease Intangible
Deferred
Adjustments to asset valuation reserves Tax Incentives
Revenue reserves
Accumulated losses
Total Assets Total Liabilities
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Statement of Income for the Year
• It had changed its form of presentation with the inclusion of new income and e
xpenditure that could affect the process of distribution of profits.
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Statement of Changes in Equity
• This demonstration has changed its form of presentation have been changed sinc
e the subgroups of Equity.
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Structure of the Statement of Changes in Equity
Adjust asset valuation
Accumulated losses Tax Incentives
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Statement of Cash Flows
• This statement, introduced by Law 11.638/07.
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Statement of Cash Flows
• Shows:
- The origin of all the money that went into the box (box + banks + applications
very short term) - The application of any amount that came out at that period,
and - The Results of Financial Flow.
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Purpose of CFD
• Provide information on the results of operations of the company's cash and wit
h financing activities and investments.
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Because the DFC helps the investor?
• Analyze the company's ability to: - Generate cash flow - pay dividends; - Know
the difference between Cash Flow and Profit - Understanding the activities of f
inance and investment company.
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What is the advantage for the market to the publication of the DFC
• Analysis: - Conversion rate of profit in cash - operating performance of diffe
rent companies,
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What is the advantage for the market to the publication of the DFC
• Analysis: - Degree of accuracy of past estimates of future cash flows - the ef
fect on the financial position of the company from investment transactions and f
inancing, etc..
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What flows shown in the Statement of Cash Flows?
• The streams are: From operations, financing, and investment.
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What's in the cash flow from operations?
•
Involving all activities related to production and delivery of goods, services a
nd events that are not defined as investing activities and financing.
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What's in the cash flow of investments?
•
Normally relate to the increase and decrease in long-term assets that the compan
y uses to produce goods and services.
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What's in the cash flow of financing?
•
From the values obtained with: loans from creditors and investors to the entity;
obtaining resources from owners and payment of these returns on their investmen
ts or of the repayment of the investment and loans with creditors and the amorti
zation or liquidation of those, as well as the collection and payment Resource c
reditors via long-term credit.
-
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Which companies are obliged to draw up and publish the Statement of Cash Flows?
• Are required for the preparation and publication of the Statement of Cash Flow
s as: held companies, private companies with net worth exceeding U.S. $ 2,000,00
0.00 (two million reais); Companies featured large.
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Structure of the Statement of Cash Flows
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What is Value Added Statement?
• It is a demonstration that shows how much wealth a company has produced.
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What is Value Added Statement?
• How much was added (aggregate) value and how this wealth was distributed to: -
employees - government - stakeholders - funders of capital - retained earnings,
etc..
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What is the purpose of the Statement of Value Added?
• •
Is an important source of information on the ability to create value, and the fo
rm of distribution of the wealth of each company.
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This allows the analysis of VAD?
• Allows analysis - The economic performance of companies, • Helps - In the calc
ulation of GDP and social indicators; • Provides information - on the benefits r
eceived by each of the factors of production, workers, financiers and government
.
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What can be seen from the publication of VAD?
• •
GDP, the level of contribution from one company to regional wealth or industry;
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What can be seen from the publication of VAD?
• •
The company's contribution to society in general through payment of taxes to the
government. Measure the level of participation of manpower in the generation of
wealth.
39
Which companies are obliged to draw up and publish the Statement of Value Added?
• Public companies.
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Structure of the Value Added Statement
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Segregation
Mercantile * * bookkeeping tax.
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Law 11638 of December 28, 2007
• The main clause of Article 177 of Law 6404/76 has not changed with the publica
tion of the Law 11638/07.
- The company's books will be kept in permanent records, in obedience to the pre
cepts of this law and commercial law and Generally Accepted Accounting Principle
s and should observe uniform accounting methods or criteria in time and record t
he changes in property under the accrual basis.
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• 6404 Law on ledgers without modification of the bookkeeping.
• Law 11.638 - alternatively, presents a new possibility of registration of the
tax provisions and legislation specified in bookkeeping, not only in ledgers
LALUR
X
LALUC
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In short ....
• The provisions of tax law or special legislation on activity that is the subje
ct of the company does not constitute an abuse of the obligation to prepare fina
ncial statements in accordance with corporate law.
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Changes in the bookkeeping record
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Bookkeeping
• In adopting this practice should be audited financial statements.
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Changes in classification of accounts in the Balance Sheet
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In Active
- Featured in specific subgroup, the Intangible Assets * (including regulatory c
osts) with development? Lacking
- Restricted the use of Deferred for: recording of expenses préoperacionais and
incremental restructuring expenses - registration of assets subject to leases in
Fixed Assets (financial leasing - all risks, controls and rewards of ownership
of assets subject to lease . Lacking regulations)
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• Expenditures on Research and Development - Main differences from the norm in B
razil - The Brazilian standard (Law 6404/76, Statement by IBRACON, CVM Instructi
on 247 and 319) says that the cost of research and development that will contrib
ute to revenue generation by more than one year may be capitalized as deferred c
harges and should be valued at their applied and deducted from accumulated amort
ization.
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IFRS 38 - INTANGIBLE ASSETS Expenses Research and Development • The IFRS suggest
s: - spending on research is launched and expenses when they occur - spending on
development, are capitalized if the company can, reliably, measure and demonstr
ate the benefits economic futures arising from these expenses.
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• Expenditures on Research and Development
- Key differences with the Brazilian standard * The Brazilian standard (Law 6404
/76, Statement by IBRACON, CVM Instruction 247 and 319) says that the cost of re
search and development that will contribute to revenue generation by more than o
ne year may be capitalized as deferred charges and should be valued at their app
lied and deducted from accumulated amortization.
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In Equity
- Elimination of revaluation reserve * Creation Group Equity Results * Eliminati
on of the Capital Reserves: * Award received on issue of debentures and donation
s and grants for investments. * Creation of Reserve Tax Incentives
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Changes in criteria for evaluation of assets and liabilities
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Big changes
• Criteria for classification and valuation of financial instruments • Adoption
of the concept of present value adjustment in the valuation of assets and liabil
ities of the relevant long term and short term; • Duty to assess the degree of r
ecovery of amounts recorded in the fixed assets, intangible and deferred; • Adop
tion of market value in the identification, evaluation and accounting of assets
and liabilities of the merged companies, split and merged; • Amendment in applyi
ng the equity method for investment evaluation.
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Financial instruments, including derivatives
- Financial instrument is any contract that gives rise to a financial asset of a
company and a financial liability or equity instrument of another. - May be int
ended for trading or available for sale or being held to maturity, depending on
your goal. - The effects caused by the instruments will affect the outcome of th
e exercise or net worth, account adjustments in equity variance according to the
classification assigned to it.
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Present Value Adjustment for assets and liabilities of long term and significant
short-term.
- The main reason for adopting this criterion of evaluation is in care of the Pr
inciple of Competency Exercises that defines the recognition of revenues and exp
enses in accordance with their taxable event.
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short-term.
- Although not explicit in the text of the Law is important to emphasize: * the
assets and liabilities are mentioned only in containing monetary values of their
presentation, some kind of compensation given to the future flow of their matur
ity, pre-fixed. (Customers, suppliers, loans and financing)
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short-term.
• Suppose a company sells a property for $ 8 million, to receive fixed in four a
nnual installments. - The value of the cash sale of the property would be $ 6 mi
llion. - The carrying value of the property on the date of preparation of the Ba
lance Sheet was $ 4 million.
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Required to assess the degree of recovery of amounts recorded in property, plant
and equipment.
IAS 36 - Impairment of Assets
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Requires
• the company to perform an analysis periodically to check the extent of recover
y of amounts recorded in property, plant and equipment.
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Recoverable value of assets
• 1st accounting standard issued by the Accounting Pronouncements Committee (CPC
) and approved by the Securities Commission - CVM and CFC. Related legislation -
CVM Resolution 527/07, which approves the Statement CPC 2001 on "Reducing the R
ecoverable Value of Assets." - Resolution No. 1.110/07 CFC approving the NBC T 1
9:10 Reducing the Recoverable Value of Assets
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Statement of Purpose
- Define procedures to ensure that assets are not recorded accounting for an amo
unt exceeding that which can be recovered in time for use in the entity's operat
ions or its possible sale
Asset or set of relevant assets related to industrial, commercial, agricultural
or farming, minerals, financial services and other
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Operations of Merger - Fission and Fusion
Big changes • Adoption of market value in the identification, evaluation and acc
ounting of assets and liabilities of the merged companies, split and merged.
Effects on the goodwill and negative goodwill ...............
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Example before the amendments of the Law 11638/07 Modification
The Cia Cia B decides to buy for U.S. $ 650,000 and the balance sheet of the CIA
's are the following:
Cia The Fixed Assets Total Current Assets Current Liabilities Shareholders Equit
y Loans Capital Total Net Income 700,000 500,000 1,200,000 100,000 400,000 700,0
00 500,000 200,000 1,900,000
Cia B 50 000 150 000 450 000 600 000 550 000 450 000 100 000 600 000
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Amount Paid = 650,000, PL = 550,000 = 100,000 Goodwill,
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Example adepted of IFRS 3
• Evaluation of Assets and Liabilities of Cia B should be made to market (Fair m
arket value, FMV). After assessment, the Fixed Assets has a value of R $ 480,000
, there is a mark of $ 50,000 and other assets and liabilities in the FMV is equ
al or book value. So scoring at Cia B should be:
50 000 480 000 150 000 Debit Credit
Current Assets Fixed Assets Current Liabilities Brand Capital Adjustment Market
Value Total
680 000
50 000 80 000 550 000 680 000
Amount Paid = 650,000, PL = 630 000, Goodwill = 20,000;
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Amendment in applying the equity method for investment evaluation
• the equity method
- This method is applied only to relevant investments in associated companies, w
hose administration has influence over or who participates with 20% or more of t
he capital, and subsidiaries. (Art.248 of Law no. 6404/76 before) "CVM includes
treated as related
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Amendment in applying the equity method for investment evaluation
- This method is applied only to investments in affiliated companies over whose
management has significant influence or which participates with 20% or more of t
he voting capitaland in subsidiaries and other companies forming part of the sa
me group or is under common control. (Article 248 of Law 6404/76 new wording) "C
VM includes treated as related
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Changes in the scope of companies subject to adoption
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Large companies
• Extension to large companies the obligation to observe the provisions of the A
ct
- It is large, for the sole purpose of Law 11.638, society or group of companies
under common control that has in the previous fiscal year, total assets exceedi
ng U.S. $ 240,000,000.00 (two hundred and forty million reais) or an annual gros
s income of R $ 300,000,000.00 (three hundred million reais).
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The process of Global Harmonization of Accounting and Auditing
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Importance of Harmonization of Standards - IAS - IFRS
• Facilitates and enables - Business and Transactions - Placement of shares and
securities, - obtaining loans and financing - buying and selling companies • Ger
a - Reduction of risks and uncertainties and - reducing costs and interest
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Structure of the IASC - since 2001
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Convergence of Brazil to international standards
• Processes previous - Possible Changes in changing corporate law • Process curr
ent and future - Moving deeper into the future following: * Changing the Corpora
te Law - important developments with the approval of Law 11.638 - December 28, 2
007 * Work for the CPC - coordinated with all market entities and regulators
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CPC - Committee of Standard Accounting
• It is the main entity in Brazil that acts in the IFRS convergence - Goal - stu
dy, preparation and issuing technical pronouncements on accounting procedures an
d disclosure of information of this nature, to allow the issuance of standards b
y the Brazilian regulator, aimed at centralizing and standardization of their pr
oduction process, always taking into account the convergence of Brazilian accoun
ting to international standards.
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CPC Speeches
• Standard Basic Concept - a Conceptual Framework • CPC - Reduction of the recov
erable value of assets - impairment • CPC 2 - Effect of changes in exchange rate
s and conversion of financial statements • In public hearings - CPC 3 - Statemen
t of Cash Flows - CPC 4 - Intangible Assets
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Standard Basic Concept - Conceptual Framework
• NBC T 1 - repealed and amended on April 29, 2008
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Reduction in the recoverable value of assets - impairment
• NBC T 19:10 - November 16, 2007
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Effect of changes in exchange rates and conversion of financial statements
• NBC T 7 - February 28, 2008
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Our goal
• Comment: - Requirement for development and dissemination of financial statemen
ts - Changes in the financial statements - Statement of Cash Flows, and - Value
Added Statement.
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And now?? Where do we start ...... Tax Impacts ...... .... ......... More contro
ls on business ......
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Amendments to the Law by Law 6404/76 11638/07
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BEFORE - Law 6404/76
Financial Statements • Art 176
AFTER - Law 11638 of 28/12/2007
DOAR - Statement of Changes in • Resources. • •
Exclusion: DOAR Inclusion: DFC - Statement of Cash Flows Inclusion: Company is P
ublicly Traded, VAD - Value Added Statement AMEND THE WRITING: § 6 The company c
losed with equity in the balance sheet date, less than $ 2,000 .000,00 (two mill
ion reais) will not be required for the preparation and publication of the state
ment of cash flows. "(NR)
the
§ 6 The privately held company, with equity in the balance sheet date • not exce
eding U.S. $ 1,000,000.00 (one million reais) will not be required for the prepa
ration and publication of statement of sources and uses of resources. (Writing b
y Law No. 9457, 1997)
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Article 177 § 2 The company notice of records assistants, without change in the
bookkeeping and the statements governed by this Law, the provisions of tax law,
or special legislation on the activity that constitutes its object, to prescribe
accounting methods or criteria or different determine the development of other
financial statements.AMEND THE WRITING: § 2 The provisions of tax law or specia
l legislation on activity that is the subject of the company leading to the use
of accounting methods or criteria different or making other statements do not el
iminate the obligation to prepare, for all purposes this Law, financial statemen
ts in accordance with the provisions in the main and should be observed by alter
natively record: I - in ledgers without modification of bookkeeping, or II - in
the case of preparing statements for tax purposes, the mercantile if they are ma
de then additional accounting entries to ensure the preparation and disclosure o
f financial statements in compliance with the provisions in the main, these stat
ements must be audited by an independent auditor registered with the Securities
Commission.
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AFTER - Law 11638 of 28/12/2007
Art 177 NOT SPECIFIED
AFTER - Law 11638 of 28/12/2007
INCLUDED: § 5 The rules issued by the Securities Commission referred to § 3 of t
his Article shall be prepared in line with international accounting standards ad
opted in the major securities markets. INCLUDED: § 6 The private companies may c
hoose to follow the rules on financial statements issued by the Securities Commi
ssion for listed companies. INCLUDED: § 7 launches adjustment made exclusively f
or harmonization of accounting standards under § 2 of this article, and the stat
ements and tabulations with them produced may not be base of taxes or have any o
ther tax effects. " (NR)
NOT PROVIDED
NOT PROVIDED
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Balance Sheet - Group Accounts
AFTER - Law 11638 of 28/12/2007 AFTER - Law 11638 of 28/12/2007
Article 178
c) fixed assets, divided into investments, asset AMEND THE WRITING: c) fixed ass
ets, divided into fixed assets and deferred charges. investments, property, plan
t and equipment. AMEND THE WRITING: d) equity, divided d) equity, divided into c
apital, reserves into share capital, capital reserves, valuation adjustments to
capital, revaluation reserves, retained earnings and equity earnings, reserves,
treasury shares and / or accumulated losses. accumulated losses. Group accounts
- balance sheet
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Balance Sheet - Group Accounts 179 Section IV - in property: the rights which ha
ve as their object goods for the maintenance of the company's activities and the
company, or exercised for this purpose, including commercial or industrial prop
erty; V - Deferred: the application of funds on expenses that contribute to the
formation of the result of more than one fiscal year, including interest paid or
credited to shareholders during the period preceding the start of the corporate
operations. Sole Paragraph. In the company where the company's operating cycle
lasts longer than the fiscal year, classified as current or long term will be ba
sed on the period of this cycle NOT PROVIDED
AFTER - Law 11638 of 28/12/2007
AMEND THE EDITOR: On fixed assets: rights that have tangible assets for maintain
ing the activities of the company or enterprise, or exercised for this purpose,
including those arising from transactions that transfer to the Company the benef
its, risks and control of these property; AMEND THE WRITING: V - in deferred: th
e pre-operating expenses and restructuring charges that will effectively contrib
ute to increase the result of more than one fiscal year and which are not tãosom
ente cost savings or increases in efficiency operational;
INCLUDED: VI - the intangible: the rights that have intangible assets for the ma
intenance of the company or exercised for this purpose, including acquired goodw
ill. "(NR)
87
Balance Sheet - Group Accounts Deferred Income Section 181. Shall be classified
as deferred income Deferred revenue, less costs and expenses related to them.
AFTER - Law 11638 of 28/12/2007
Article 181. (VETOED) remains the art. 181 of Law 6404/76
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Balance Sheet - .182 Art Group Accounts - Equity c) the premium received on issu
e of debentures; d) donations and grants for investment. § 3 will be classified
as revaluation reserves the compensatory increases in value attributed to asset
due to new assessments based on a report pursuant to Article 8, approved by the
general meeting.
AFTER - Law 11638 of 28/12/2007
c) (repealed) d) (repealed). AMEND THE WRITING: § 3 will be classified as equity
valuation adjustments, while not computed in earnings in line with the accrual
basis, the compensatory increases or decreases in value attributed to asset (§ 5
of art. 177, item I of the chapeau of Art. 183 § 3 of art. 226 of this Act) and
liabilities as a result of their assessment at market price. "(NR)
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Criteria for the Evaluation of Assets
AFTER - Law 11638 of 28/12/2007
AMEND THE EDITOR: I - Investments in financial instruments, including derivative
s, and rights and debt obligations classified as current assets or noncurrent as
sets: a) at its market value or equivalent value, when dealing with applications
for trading or available for sale, and
Article 183. I - the rights and securities, and any securities not classified as
investments, at cost or market value, whichever is less, will be excluded from
those already prescribed and made adequate provision to adjust it to the likely
value , and will be allowed to increase the cost of acquisition, to the extent o
f the market value for the registration of monetary correction, exchange rate or
interest accrued;
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Criteria for the Evaluation of Assets
AFTER - Law 11638 of 28/12/2007
b) at cost of acquisition or issue price, updated as legal or contractual provis
ions, adjusted for the likely realizable value, when it is lower in the case of
other applications and the rights and securities; II - ditto the Law 6404/76 III
- IV ditto - ditto V - VI idem - idem
Not provided
maintained maintained maintained maintained maintained
91
Criteria for the Evaluation of Assets Not provided
AFTER - Law 11638 of 28/12/2007
INCLUDED: VII - classified as intangible rights, the cost incurred in the acquis
ition minus the balance of his account of depreciation; INCLUDED: VIII - related
assets of long-term operations will be adjusted to present value, and the other
set when there significant effect. § 1 º.......................................
...... d) financial instruments, the value that can be obtained in an active mar
ket, not compulsory due to transaction conducted between unrelated parties and,
in the absence of an active market for a particular financial instrument:
Not provided Not provided
Not provided
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Criteria for the Evaluation of Assets Not provided
AFTER - Law 11638 of 28/12/2007
1) the amount that can be achieved in a market with active trading in other fina
ncial instrument in nature, terms and risks, 2) the net present value of future
cash flows for financial instruments of nature or similar term and risk; 3) the
value obtained by matemáticoestatísticos models for pricing financial instrument
s § 2 The decline in the value of such assets, intangible and deferred charges w
ill be filed periodically in the balance: ............. ........................
............
Not provided not provided not provided not provided
93
Criteria for the Evaluation of Assets Not provided Not provided
AFTER - Law 11638 of 28/12/2007
§ 3 The company should perform an analysis periodically on the recovery of amoun
ts recorded in fixed assets to intangible assets and deferred, so that they are:
I - recorded losses of value of capital invested when there is a decision to di
scontinue the business or activities its intended purpose or if proven that they
can not produce results sufficient to recover that amount, or II - reviewed and
adjusted the criteria for determining the estimated useful lives and to calcula
te depreciation, depletion and amortization. "(NR)
Not provided
94
Amendments to the Law 6.404/76 by Law 11.638/07
Evaluation Criteria Liabilities Article 184
AFTER - Law 11638 of 28/12/2007
III - bonds are subject to restatement AMEND THE WRITING: III - the obligations,
costs and current at the balance sheet date the risks listed under long-term li
abilities are adjusted to present value, and the other set when there is a signi
ficant effect. "(NR)
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Statement of Income for the Year VI Article 187 - the shares of debentures, empl
oyees, directors and founders' shares, and contributions to institutions or welf
are funds or welfare of employees; VII - ....... § 1 º.... § 2 The rising value
of the active elements in light of new assessments, recorded as revaluation rese
rve (Article 182, § 3) only be performed after computed as income for purposes o
f dividends or interests.
AFTER - Law 11638 of 28/12/2007
AMEND THE WRITING: VI - holdings of debentures, employees and managers, even in
the form of financial instruments and institutions or welfare funds or welfare o
f employees, which are not characterized as an expense, § 2 (Revoked). "( NR)
96
Statements of Cash Flows and the Value Added Section 188 NEW STRUCTURE
AFTER - Law 11638 of 28/12/2007
Statement of Changes in Financial - it is no longer the DOAR and become included
- DOAR The Statements of Cash Flows and the Value Added Section 188. The demons
tration of the origins and applications AMEND THE WRITING: Art 188. The resource
statements indicate the changes in financial position of those in sections IV a
nd V of the chapeau of Art. 176 of this Act company, specifying: indicate, at le
ast: I - The Origins of resources, grouped as: I - profit and cash flow - change
s that occurred during the year, the balance of cash and cash equivalents, segre
gating these changes in at least three (3) flows:
97
Statements of Cash Flows and the Value Added Section 188 NEW STRUCTURE
AFTER - Law 11638 of 28/12/2007
a) net income plus depreciation,) operations, depletion and amortization, or adj
usted by the change in deferred income, b) completion of capital contributions a
nd b) of funds, and capital reserves; c) resources others, originating from the
increase in c) of investments, long-term liabilities, reducing the long-term ass
ets and the sale of investments and rights of property.
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Statements of Cash Flows and the Value Added Section 188 II - applications of re
sources, grouped into: II - Demonstration of added value - the value of the weal
th generated by the company, its distribution among the elements that contribute
d to the generation of wealth such as employees, lenders, shareholders, governme
nt and others, as well as the portion of wealth is not distributed. "(NR)
AFTER - Law 11638 of 28/12/2007
a) dividends; b) vesting of property, c) increase in long-term assets, investmen
ts and deferred charges, d) reduction of long-term liabilities. III - the excess
or insufficiency of the origins of resources in relation to applications, an in
crease or reduction in working capital IV - the balances at the beginning and en
d of the year, the assets and liabilities, the amount of net working capital and
its increase or decrease during exercise.
99
Book Unrealized Profit Art 197. II - profit, gain or income which in operations
within the financial implementation occurs after the end of next fiscal year. (I
ncluded by Law No. 10303, 2001)
AFTER - Law 11638 of 28/12/2007
AMEND THE WRITING II - profit, income or net gain in transactions or accounting
for assets and liabilities at market value and the term of the financial impleme
ntation occurs after the end of next fiscal year. "(NR)
100
Limit the balance of revenue reserves Art 199. The balance of reserves, except f
or contingencies and profits to be made,not exceed the capital; reached that li
mit, the assembly will decide on the application of the excess payment or increa
se of capital stock, or dividend payments.
AFTER - Law 11638 of 28/12/2007
AMEND THE WRITING: Art 199. The balance of reserves, except for contingencies, t
ax incentives and profits to be realized, may not exceed capital; reached that l
imit, the assembly will decide on the application of the excess payment or incre
ase of capital stock, or distribution of dividends. (NR)
101
Seite 34
Transformation, Merger, Fusion and Fission Art 226 NOT SPECIFIED
AFTER - Law 11638 of 28/12/2007
INCLUDED: § 3 In the transactions referred to in the main, carried out between u
nrelated parties and linked to the effective transfer of control, the assets and
liabilities of the company being acquired or resulting from merger or division
shall be recorded at their market value. "(NR )
102
Evaluation of Investment in Affiliates and Subsidiaries Section 248. The balance
sheet of the company, relevant investments (article 247, sole paragraph) in aff
iliated companies over whose management has influence, or who participates with
20% (twenty percent) or more of the share capital in subsidiaries and will be as
sessed the amount of equity, according to the following standards:
AFTER - Law 11638 of 28/12/2007
AMEND THE WRITING: Art 248. In the company's balance sheet, investments in affil
iated companies over whose management has significant influence, or who particip
ates with 20% (twenty percent) or more of the voting capital in subsidiaries and
other companies forming part of a group or are under common control shall be va
lued by the equity method, according to the following standards: (NR)
103
"Tax Incentive Reserve NOT PROVIDED NOT PROVIDED
AFTER - Law 11638 of 28/12/2007
INCLUDED: Article 2 of Law No. 6,404 of December 15, 1976, becomes effective plu
s the following art. 195-A: Tax Incentive Reserve Article 195-A. The General Ass
embly may, on proposal of the administration, intended for the reservation of ta
x incentives portion of net income arising from donations or subventions, which
may be excluded from the calculation basis of the mandatory dividend (item I of
the chapeau of art. 202 of this Act). "
104
Seite 35
NOT PROVIDED
AFTER - Law 11638 of 28/12/2007
INCLUDED: Article 3 apply to companies with large, though not incorporated in th
e form of joint stock companies, the provisions of Law No. 6,404 of December 15,
1976, on bookkeeping and preparation of financial statements and the requiremen
t of independent audit by an auditor registered with the Securities and Exchange
Commission. INCLUDED: Sole Paragraph. It is considered large for the sole purpo
se of this Act, a company or group of companies under common control that has in
the previous fiscal year, total assets exceeding U.S. $ 240,000,000.00 (two hun
dred and forty million dollars) or an annual gross income of R $ 300,000,000.00
(three hundred million reais).
Financial Statements of Companies Large
NOT PROVIDED
105
CHANGES IN LAW 6385 - which created the CVM NOT PROVIDED
AFTER - Law 11638 of 28/12/2007
INCLUDED: Article 4 The standards referred to in items I, II and IV of § 1 of Ar
t. 22 of Law No. 6385 of December 7, 1976, may be specified categories of public
companies and other issuers of securities depending on their size and species a
nd classes of securities they issued and traded in the market. INCLUDED: Article
5 of Law No. 6385 of December 7, 1976, becomes effective plus the following art
. 10-A: INCLUDED: "Art 10a. The Securities Commission, the Central Bank of Brazi
l and other agencies and regulatory agencies may enter into an agreement with an
entity that has as its object the study and dissemination of principles, norms
and standards of accounting and audit, and may, in exercising its regulatory pow
ers , adopting, in whole or in part, pronouncements and other technical guidance
issued.
106
NOT PROVIDED NOT PROVIDED IN THE LAW OF 6385 07/12/1976
CHANGES IN LAW 6385 - which created the CVM NOT INCLUDED UNDER: Sole Paragraph.
The entity referred to in the main should be mainly composed of accountants, doi
ng her part, equal numbers, representatives of organizations representing compan
ies subject to the system of preparing financial statements provided in this Law
, companies which audit and analyze financial statements, the organ Federal over
sight of the profession of accounting and university or research institute recog
nized with performance in accounting and capital markets. "INCLUDED: Art 6 The e
xisting balances in the revaluation reserve should be maintained until the actua
l achievement or reversed by the end of the fiscal year in which this Act comes
into force. INCLUDED: Art 7 The statements referred to in sections IV and V of t
he chapeau of Art. 176 of Law 6,404 of December 15, 1976, may be disclosed in th
e first year of this Act, without an indication of the values corresponding to t
he previous year.
AFTER - Law 11638 of 28/12/2007
NOT PROVIDED
NOT PROVIDED
107
Seite 36
CHANGES IN LAW 6385 - which created the CVM NOT INCLUDED UNDER: Art 8 Consolidat
ed texts of the Laws No. 6404 of December 15, 1976, and 6385 of December 7, 1976
, with all the modifications made to them by subsequent legislation, including t
his Act shall be published in the Official Gazette by the Executive . REPEAL:
AFTER - Law 11638 of 28/12/2007
ART. 182
§ 1 shall be classified as capital reserve accounts Article 10. Are hereby repea
led points that register - the )....; b )....; c) the premium received on issue
of debentures; d) donations and grants for investment. ART. 187 c and d of § 1 o
f Art. 182 § 2 and increasing the value of active elements because of - the § 2
of art. 187 of Law 6,404 of December 15, new assessments, recorded as a revaluat
ion reserve in 1976. (Article 182, § 3) only be performed after computed as inco
me for purposes of dividends or interests.
108
Seite 37

Apostila Law 11 638

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Apostila Law 11 638

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Law 11638 - A revolution in business accounting

Adriana Marques Dias

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