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FINANCIAL LIABILITIES Fixed Term Deposits

Debit or payables as SMEs Plan:

initial rating by the cost, which amounts to fair value of the consideration received adjusted for transaction costs directly attributable to them; however, these past, as well as financial commitments to be charged to the company when debts originate with third parties, may be recorded in the profit and loss upon initial recognition.

Subsequent measurement at amortized cost. Accrued interest is credited to the profit and loss account using the method effective interest rate.

Notwithstanding the foregoing, the debts with a maturity not exceeding one year, according to be initially measured at their nominal value, will continue to be valued for that amount.

Here there is a difference between financial liabilities measured at amortized cost according to the PGC PGC Normal and according to the SME, and the latter have the potential to lead to P & G the initial costs of the contract, so the amortized cost, is actually the capital outstanding, and the effective interest rate on the loan will be nominal.

A practical example of setting a loan under Normal General Plan is the next while the case of using the Plan of SMEs will not have changed the accounting for the loan and will not do any adjustment.

Leasing:

Similarly happen to the leases, which must be accounted for under the amortized cost, the latter being for those who opt for the SME Plan, optionally, the slope Capital leasing.

Care: If you have recorded deferred interest expense of leasing the 272 in the opening entry in 2008 will have to take them to a reserve account, while making the adjustment in the 170 to reflect the amortized cost, which will record the tax effect as explained in the previous example.

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Fixed term deposits can be long or short term.

can also settled in the short or long term.

Normal PGC

What seems clear is to be classified as "held to maturity" and therefore be valued at fair value beginning (value of-pocket costs) and subsequently at amortized cost.

If the impositions are LP:

258. Fixed-term (When the term deposits have been agreed with banks involved, the investment is accounted for in the 242).

shall appear on the non-current asset balance.

Their movement is as follows:

a) be charged with the execution, by the amount given

b) shall be paid to the recovery or early transfer of funds.

corresponding account in the CP are also included, with due account development in four digits, interest explicit Receivables with maturity not exceeding one year, term deposits. As bear the interests of long term deposits receivable in the year.

Example 1:

Movement: Imposition of 200,000 with 10,000 of commission:

210,000 (258) to 210,000 (572)

To this end, the initial measurement of financial assets are recorded independently, depending on their maturity, the amount of interest Accrued explicit in that time. The term "explicit interest" those obtained by applying the contractual interest rate financial instrument.

explicit Interest Accrued on the CP are:

interests as the TIE method are (eg) 2,000, while explicit interest will be 2,500 for that year:

2,500 (548) to 2000 (769)

500 (258)

Al

maturity of interest:

2500 (572) to (548) 2,500

next year, according to the TIE interest is calculated on 209,500 against (769) and under the contract explicit.

Example 2.

If the tax is payable to LP, it seems that only this seat will be needed, since it will have accrued interest until the end:

210,000 (258) to 210,000 (572)

After years

x 270 000 (572) to (258) 190 000

(769) 80,000

If the deposits are short term

note under the plan know that all income / expense in the year are not subject to update, so no need to calculate the amortized cost of an IPF with CP.

548. Short-term deposits

also be included, with due account development in four digits, interest receivable, with maturity not exceeding one year, term deposits.

When time deposits have been entered into with related parties, the investment is accounted for in the 532.

a) be charged with the execution, by the amount given (against 572) or by the interest received that year (769).

b) shall be paid to the recovery of the imposition or recovery of interest against the (572).

SME Plan:

Those financial assets not being equity instruments or derivatives, no commercial source and whose fees are fixed or determinable amount, be classified as "Financial assets at amortized cost."

initially be valued at cost, which amounts to fair value of the consideration paid plus transaction costs directly attributable to them; care: the latter can be recorded in the profit and loss account at the time of recognition initial.

subsequently measured at amortized cost. Accrued interest is credited to the account of P and G, using the method of effective interest rate.

So if it was decided to go directly to P & G contract costs, the effective interest coincide with the explicit interest.

In practice

Account 258. Long term deposits

When time deposits have been agreed with banks involved, the investment is accounted for in the 242.

a) be charged with the execution, by the amount given ( can decide whether to add transaction costs or lead to P & G).

b) shall be paid to the recovery or early transfer of funds. If you have included the costs of the transaction, each year must be adjusted to the SC's share explicit interest rate has not been Clo.

Example:

Imposition of 200,000 with 10,000 of commission:

Possibility 1 (the initial costs are carried P & L):

200 000 (258 ) to 210,000 (572)

10,000 (669)

Al recovery of interest:

(572) 2,500 to (769) 2,500

Possibility 2 (to be included in the assets):

210,000 (242) to 210,000 (572)

Al accrual of interests

2500 (548) to 500 (258)

2000 (769)

Al recovery of interest

(572) 2,500 to (548) 2,500

Account 548. Short-term deposits ( When time deposits have been arranged with parties involved, the investment will be reflected in the account 532.)

also be included, with due account development in four digits, interest receivable, with maturity not exceeding one year, term deposits.

shall appear on the current asset balance.

shall be paid to the recovery or transfer of funds.

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Posting a

1. Long Term Maintenance and without this group of companies:

In the PGC Normal:

be considered, for purposes of valuation, as Financial assets available for sale .

be listed in non-current assets, accounts of group 25.

The initial assessment of these assets will be initially at fair value, unless evidence to the contrary, will transaction price - which is equal to the fair value of the consideration given plus transaction costs to them directly attributable.

Plan qualifies to be part of the initial assessment the amount of preferential subscription rights and the like which, if any, had been purchased. Regarding the

subsequent valuation, the financial assets available for sale be valued at fair value, without deducting transaction costs that might be incurred in disposal.

will have to ask two questions:

1. Has changed the fair value of the asset?

a. If the answer is negative at year-end will not do anything.

b. If the answer is yes (because the shares are traded and their value has changed, because the present value of expected cash flows from this investment and disposal differ from book value (book), the net asset value the company has changed reliably compared to what it was before) we must ask whether this change is unrecoverable (well to be a continued deterioration in value, or because it is considered that not recoverable book value - Case 1) or likely to change again - Case 2.

Case 1. In the first case we have a impairment, which will be reflected in the profit and loss account. Reversal of impairment will limit the carrying value of the investment that would be recognized at the date of reversion if he had not recorded an impairment.

Briefly:

Account 250. long-term financial investments in equity instruments payable on the amount of damage estimated to account under 696. There has 290 for impairment.

Case 2. In the second case, the changes that occur in fair value are recorded directly in the PN , until the financial asset is derecognised cause or deteriorate (Case 1) , time the amount so recognized shall be charged to the profit and loss account.

Briefly:

Account 250. long-term financial investments in equity instruments charge or pay for the changes in fair value, with credit or debit, respectively, 900 and 800 accounts. There has 290 for impairment.

On the other hand, the accumulated losses, recognized in the PN by decline in fair value, whenever there is objective evidence of impairment in asset value be recognized in the profit and loss account at the time.

If it is low:

Account 250. long-term financial investments in equity instruments payable on disposals and in general for its low of the asset under generally entitled to 57 sub accounts, if any outstanding payments to the account 259 or, if , at 549 and account for losses to the account 666. Therefore

has to distinguish between valuation adjustment for increase or decrease in fair value or valuation allowance for impairment.

The first was recorded in equity until the sale is made, and varies the amount of the asset's fair value.

The second will be recorded in the profit and loss account and can be reversed by crediting the same account, and vary the amount of the asset's fair value.

SMEs in the PGC:

This investment would qualify for valuation purposes as financial assets at cost , because according to the PGC of SMEs in this category are classified (...) and other equity instruments unless the latter be "held for trading instruments."

Investments in equity instruments included in this category are valued initially at cost, which amounts to fair value of the consideration paid plus transaction costs directly attributable to them ... be part of the initial assessment the amount of preferential subscription rights and the like which, if any, had been purchased.

So in this sense there would be no changes to the PGC Normal.

ATTENTION: Investments in equity instruments included in this category measured at cost less, where applicable, the cumulative amount of impairment losses, which are recorded in an account of Impaired Value (29).

At least at each financial year, shall be necessary valuation adjustments whenever there is objective evidence that the carrying value of an investment will not be recoverable. The impairment losses and, where appropriate, their reversal is recorded in P & G. The reversal of impairment will be limited to the carrying value of investment be recognized at the date of reversion if there had been recorded for impairment.

Briefly:

Movement Account 296. Impairment of equity investments in the long term

Their movement is as follows:

shall be payable for the estimated amount of impairment, with a charge to 696.

be charged:

1) When determining causes disappear recognition correction impaired, credited to the account 796.

2) When you dispose of the financial assets is derecognised or asset for any reason, with credit to sub-accounts 25.

So in this case only be made valuation adjustments impairment or reversal of this deterioration , imputing them to the profit and loss account.

If it is low (same as in the PGC Normal):

Account 250. Long-term investments in equity instruments be paid by the general dispositions and asset due to its low , fee, general mind, 57 sub accounts, if any outstanding payments to the account 259 or, where appropriate, to account 549 and in case of loss to account 666.

2. Group companies, joint ventures or associates:

The PGC Normal:

Its Initial Assessment be a cost which amounts to fair value of the consideration given plus transaction costs directly attributable to them.

be part of the initial assessment the amount of preferential subscription rights and the like which, if any, had been purchased.

However, if there is an investment prior to its classification as a company, jointly controlled entity or associate ( Securities held for trading or for sale ) is considered as the cost of the investment the book value should be immediately before that the company happens to have that qualification.

subsequently measured at cost less, where applicable, the cumulative amount of impairment losses (Here there are 293)

The valuation adjustments will whenever there is objective evidence that the carrying value of an investment is not recoverable . The amount of the valuation adjustment is the difference between book value and recoverable amount. Unless better evidence is taken into account the equity of the investee adjusted for the unrealized gains at the valuation date.

For previous valuation adjustments for increases in value:

The impairment losses were recorded from the investment account (240 or 530) against the NP starting to collect the valuation adjustments to the amount previously charged the same and the excess, if any, are recorded in the profit and loss account over the 293.

The reversal of impairment will be limited to the carrying value of investment be recognized at the date of reversion if there had been recorded for impairment.

For previous valuation adjustments and write-downs (which could only go to PN)

If the recoverable amount exceeds the book value of investments, the latter will be increased to the limit indicated reduction of value from the game that collected the previous valuation adjustments of the PN and from that moment the new amount raised will be considered investment costs. Accounts

LP

2403/2404. long-term holdings in group companies / associated companies

a) charged:

a2) If, at the time that the recoverable value exceeds the book value of investments, to limit the previous negative valuation adjustments recognized directly in to PN, with credit to the accounts 991 or 992.

b) shall be paid:

b1) If, in the amount of damage estimated to The limit of the previous positive valuation adjustments recognized directly in to PN, accounts under 891 or 892.

From there we will use the account 293. Impairment of long-term interests in related parties payable for the estimated remaining amount of the impairment, to be charged to profit and loss account under account 696.

Impairment Accounts: The account 293 is charged:

b1) When the causes that ended the recognition of impairment losses, with credit to the account 796.

b2) When you dispose of the financial assets is derecognised or asset for any reason, with credit to sub-accounts 24. Accounts

CP

530. Shares short-term related parties

5303/5304 short-term holdings in group companies / associated companies

a) will be charged where appropriate at the time that the recoverable amount is higher than the accounting for investments, to limit the negative valuation adjustments prior charged directly to equity, credited to the accounts 991 or 992.

b) shall be payable if, for the amount of damage estimated to The limit of the previous positive valuation adjustments charged directly equity accounts under 891 or 892.

If it is low

When you need to assign values \u200b\u200bto these assets off the balance sheet or otherwise, apply the weighted average cost method for homogeneous groups, defined as having equal values rights.

In the case of sale of preemptive rights and the like or segregation of these for the exercise, the amount of the cost of allowances will reduce the book value of related assets. This charge a formula determined by applying generally accepted valuation.

divestitures and generally by low asset shall be charged generally with 57 sub accounts, if any outstanding payments to the account or possibly 249, 539 and to account for losses to account 673 or 666.

The Plan of SMEs

Investments in group companies, joint ventures or affiliates shall be classified for valuation purposes as Financial assets at cost.

The initial assessment will be made exactly as in the Normal Plan. Be part of the initial assessment the amount of preferential subscription rights and the like that, where appropriate, had been purchased.

Investments in equity instruments included in this category are subsequently measured at cost less, where applicable, the cumulative amount of impairment losses. (Here's account 293)

The necessary valuation adjustments will be made whenever there is objective evidence that the carrying value of an investment will not be recoverable.

The amount of the valuation adjustment is the difference between book value and recoverable amount, but better evidence is taken into account the equity of the investee corrected by the unrealized gains on the date of valuation.

The impairment losses and, where appropriate, their reversal be recorded as the account of P and G . The reversal of impairment will be limited to the carrying value of investment be recognized at the date of reversion if there had been recorded for impairment.

293. Impairment of long-term interests related parties

movement cited accounts of four figures is as follows:

a) shall be payable in the amount of damage estimated to account under 696.

b) charged:

b1) When the causes that ended the recognition of impairment losses, with credit to the account 796.

b2) When you dispose of the financial assets is derecognised or asset for any reason, with credit to sub-accounts 24.

Short term:

593. deteriorating value of shares in the short term related parties

Movement cited accounts of four figures is as follows:

a) shall be payable in the amount of damage estimated to account under 698.

b) charged:

b1) When the causes that ended the recognition of impairment losses, with credit to the account 798.

b2) When disposing of the securities or assets disenrolled for any reason, with credit to sub-accounts 53.

In the case of low

When you need to assign values \u200b\u200bto these assets off the balance sheet or otherwise, apply the weighted average cost method for homogeneous groups they understood the values \u200b\u200bthat have equal rights.

In the case of sale of preemptive rights and the like or segregation of these for the exercise, the amount of the cost of allowances will reduce the book value of related assets. Such costs shall be determined by applying a formula generally accepted valuation.

Accounts: 2403/2404/2405

b) paid for the disposal and in general for its low of the asset under generally entitled to 57 sub accounts, if any outstanding payments to the account 249 or, case, 539 and account for losses to the account 673.

530. Holdings short-term related parties

5303/5304 short-term holdings in group companies / associated companies

b) shall be payable by the disposals and in general for its low of the asset under generally sub-group to accounts 57, if there are pending payments to the account 539 and in case of loss to account 666.

3. Portfolio of short-term

In the case of using the PGC Normal:

The financial assets held for trading be valued initially at fair value, unless evidence Otherwise, it will the price of the transaction, which is equal to the fair value of the consideration given. Note: Transaction costs directly attributable to them will be recognized in P & G account for the year.

case of equity instruments will be part of the initial assessment the amount of preferential subscription rights and the like which, if any, had been purchased.

changes occurring in the fair value is charged to the account of P and G for the year.

shall appear on the balance of current assets,

Briefly:

Account 540. Short-term investments in equity instruments

be charged for changes in fair value credited to the account 763.

shall be payable for changes in fair value charged to account 663.

If alienation:

For disposals and in general for the asset, from, generally, 57 and sub-accounts if there are outstanding payments to the account 549.

There is no impairment account.

. In the event that these values \u200b\u200bare the accounts of related companies are:

5305 Short-term Investments in other related parties

be charged for changes in fair value credited to the account 763.

shall be payable for changes in fair value charged to account 663.

If alienation:

For disposals and in general for its low of the asset under generally at 57 and sub-accounts if there are outstanding payments to the account 539.

The Plan of SMEs

respect to assets held for trading are no changes to the PGC Normal.

Briefly:

Account 540. Short-term investments in equity instruments

be charged for changes in fair value credited to the account 763.

shall be payable for changes in fair value charged to account 663.

sale If

For disposals and in general for the asset, from, generally, 57 and sub-accounts if there are outstanding payments to the account 549.

. In the case of being a short-term portfolio of related companies:

5305. Holdings short-term related parties

be charged for changes in fair value credited to the account 763.

shall be payable for changes in fair value charged to account 663.

sale If

For disposals and in general for its low of the asset under generally at 57 and sub-accounts if there are outstanding payments to the account 539.

So in this case the two plans are identical.

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Equity Portfolio Accounting Reform

After the establishment of relevant models, the end of 2007 and accounting departments and more relaxed .... We have to deal with what until now had either not wanted or hear words, or we looked askance prelim to estimate its impact on our accounts: The new General Accounting Plan and the General Plan adopted Accounting for SMEs government not long ago.

could refer you to hundreds of sources that are already concerned to give practical expression to the accounting reform, which some have described as the biggest conceptual change in accounting from the Plan 73.

Now we have to make the necessary adjustments in the opening entry in 2008. Since customers have been asking us about need to present comparative financial statements of 2007 ... and therefore make the adjustment at the opening of 2007 and the "recontabilización", according to new criteria for registration and evaluation, of the elements of the annual accounts. In my opinion, except as required by relevant stakeholders, should not go back to such changes, because the plan gives freedom in this regard. Yes, we will introduce the report a note on the "Settings derivatives Transition to the New Plan." Ultimately to be limited to the accounts for 2007 as the Old Plan, the seat adjustment made to the opening, and nothing more.

Important to note that any adjustment of the seat opening has to be a reserve account, so it is forbidden to compensate many assets and liabilities (272 and 170)

Depending on the amount and complexity of operations performed by a company, change will be more or less drastic.

limits for filing the PGC in Normal mode, have increased considerably, so that those who do not comply (two consecutive years except those that exceeded the previous limits on 7/12/1931) may well benefit from the Plan Short Account or Plan of SMEs, whose main novelty is the elimination of complexities introduced in Normal and Short Plan (counts 8 and 9) and valuation simpler and consistent with what was being done hitherto.

first mention the accounting for assets and financial liabilities at amortized cost, a more homogeneous accrue transaction costs by using the effective interest rate. Which, in the case of those companies covered by the plan of SMEs will be much easier to be able to bear the costs of transactions in financial instruments directly to profit and loss.

Second, some financial assets that suffer changes in fair value (present value or market) will reflect these changes in equity, while not considered a real impairment in value or reversal of this impairment. These are called assets held for sale (stock portfolio or mutual fund companies than the group or held for trading). SMEs in the PGC only reflect impairments and will be in P & L.

And much more ... than continue talking. Do not hesitate to visit the website of SCD SL Auditors in paragraphs of "Accounting Reform" forum and "Clients" in www.carazodurban.com .

and encouragement to those responsible for fiscal policy of the companies ... because although the reform was intended to be "fiscally neutral", we must be careful accounting adjustments to actually be.

Slowly we approached, timidly Europe.