The application of this new accounting standard is applied to accounting statements - DC of the calendar year started on 01.01.2010.
The procedures to be observed to the called Initial Adoption are described in section 35 of the referred Pronunciation.
The first step is to identify which of the 35 sections are applied to each company, case by case.
It's necessary to make possible the comparativeness between DC regarding the calendar years of 2010 and 2009. For such, it's necessary the adjustments arisen from the application of new standards are evidenced in the identity's opening balance (transition date).
In the opening balance, PME should: (i) recognize all assets and liabilities according to the requirements; (ii) not to recognize the assets and liabilities if not allowed; (iii) make re-classifications to meet the new accounting standard; (iv) measure assets and liabilities, everything according to CPC PME.
In fact, the opening balance shall be adjusted so as DC, especially DRE and the Balance Sheet are comparative, using the same accounting standard.
The adjustments necessary to meet the new accounting standard, are made in 2010 booking.
In order to enable the accounting information user has full knowledge of the effects of the adjustments made, the standard foresees the disclosure of reconciliations of the net worth of the transaction date, 01.01.2009, and of 12.31.2010, indicating the worth calculated before and after the adjustments.
Section 35 of CPC PME foresees some exemptions in the Initial Adoption.
An important point is the definition that at the Initial Adoption, the entities should not alter retrospectively (from the transaction origin), certain operations among them, the accounting estimate.
The definition is important, otherwise, the depreciation rates, characterized as one of the accounting estimate should be reviewed from the acquisition date of goods, what would be much expensive to PME.
It's in section 35 that lies the grounds for the application of the cost assigned for the purpose of measuring the fixed assets and the priority for investments. The adoption of these practices that means replacing the cost of those assets, for their market value (fair value) is only allowed in the Initial Adoption.
PEDRO CESAR DA SILVA
Accountant, Attorney and Director of ASPR