Tuesday, July 3, 2012

The Restatement: Rest In Peace


As you probably know, last August 27 CINIF we released the new Financial Reporting Standards FRS B-10, NIF and NIF D-4 D-3. The three standards include substantial changes to its application, however it is worth noting that the most important change is that from 2008, and need not be restated Financial Information for inflation. This "Newsletter" is intended to show you, dear readers, the main changes that are included in the three standards which will come into force from January 1, 2008. I hope you find it useful. The new financial reporting standard FRS B10 on the restatement of financial statements, the following changes: 1. It includes the ability to use inflation as an index of rate of change of the Investment Units UDI instead of CPI, since the former have more opportunity to the time of arming the financial statements. 2. It eliminates the possibility of restating inventory through the replacement cost. 3. It eliminates the possibility of restating fixed assets by the method of indexing. 4. Defines two environments: a) Inflation, with cumulative inflation greater than 26% in the last three years (8.6% annually).

Under this assumption should be fully restated financial information. b) non-inflationary, with lower cumulative inflation of 26% in the last three years. Under this assumption should not be restated financial information. 5. Disconnection of inflation accounting. Before changing a non-inflationary inflationary environment, states that should not recognize the effects of inflation in the period in which this happens.

6. Inflationary Accounting Connection. Before the change of non-inflationary environment of inflation, states that should recognize the effects of inflation not recognized in the periods in which the environment was described as non-inflationary. 7. Results from holding nonmonetary assets (RETANOM). The Standard states that the balance of RETANOM companies have, must be recognized in earnings as they do. When this has not been made, the rule states that the Retanom be kept in Stockholders' Equity. In the event that the company has not decided if this account has already been done or not, the standard indicates that cumulative result must be sent to the company. 8. Monetary loss Heritage (Heritage REPOMO). The Heritage REPOMO is considered by the standard as a starting accrued and carried, so to be sent to retained earnings in 2008. Similarly amending Standard NIF D-4 and the following changes: 1. It sends the calculation of deferred profit sharing to NIF D-3 which effectively states that must be calculated each year. 2. The IMPAC nature which has become a right of accreditation, is considered a deferred tax asset as long as credit is shown that in subsequent years.

3. Retrospective Method. Given the changes in the rule and considering the provisions of the NIF B-1, seats should be run retrospectively for the balance of 2008 is comparable with 2007. 4. Cumulative effect of deferred taxes. It requires that the cumulative effect of deferred taxes is sent against the retained earnings account, so that it becomes a profit or loss for that purpose. Finally, the amendment to the New Standard NIF D-3 Labor Liabilities includes the following changes: 1. Recognition of gains or losses. The new mandated standards that companies on their performance gains or losses in the year in which they know, so that in the event that there are variations in the assumptions used in the original calculation against incurred actual calculation, these variations can be incorporated into the income statement. 2. Recognition of the Provision for termination of employment. The Standard believes that companies need to make an estimate of the liability for termination of the employment relationship and take effect against the profit or loss. 3. Recognition of the OCT, including the Deferred PTU.

The Standard states that companies must recognize a liability for the OCTs and the liability for deferred employee profit sharing. All these changes and more, we will see in our next seminar on Financial Reporting, which impart the month of October. I'll be glad you have some of the participants to discuss and delve deeper into these issues. For more information visit my website. Mariano Latapi

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