The legislation and laws in Brazil about accounting and bookkeeping are constantly changing and your company must stay aware and be fully compliant.
Financial reporting requirements in Brazil are governed by Laws No. 11638/07, 11.941/09 and 12.973/14, which align with International Accounting Standards (IAS/ IFRS). The specific accounting standards are published by an accounting entity that has existed since 2008 called CPC (Comitê de Pronunciamentos Contábeis). The standards are approved by the Federal Accounting Council (CFC) and the Brazilian Securities and Exchange Commission (CVM).
One of the newest, and most important standards, is CPC 47 (corresponding to the IFRS 15) which focuses on revenue recognition due to contracts. This revenue recognition should occur when the client obtains control over the acquired goods or services. Companies must be prepared to report their revenue in accordance to these rules through financial statements to avoid penalties and tax inspection. Businesses will have to evaluate their activities and where the revenue has come from. Under this new standard, there are risks for the companies that are not in compliance with the CPC 47.
Each CPC has a specific purpose and focus which can be very complex to navigate. There are a specific CPCs for small and medium sized entities which are called CPC PME. This CPC focuses on balance sheets and income statement accounts. In terms of fixed assets, they will...