The Commission of Accounting Principles (CPC), through the Mexican Institute of Public Accountants (IMCP), has the function of providing standards in the matter in two ways:
A) Issuing new pronouncements.
B) Reviewing and updating those previously issued.
The International Accounting Standards Committee (IASC) was established in 1973 to promote the improvement and harmonization of financial information, primarily through the development and publication of international accounting standards (IAS), via a formal process. involving the global profession, prepared and users of financial statements and national regulatory bodies.
Its purposes are to formulate and publish accounting standards for the presentation of financial statements and to promote their acceptance and observation worldwide. Work and advocate for the development and harmonization of accounting principles related to the presentation of financial statements.
Regarding accounting principles generally accepted in Mexico, it is understood that a supplementary nature exists when in a set of specific rules the possibility is provided that the absence of provisions be covered by a formal and recognized set of rules other than Mexican ones.
Definition of standard.
IASs approved and issued by the IASC are, in addition to part of the generally accepted accounting principles in Mexico, whose application is subject to the following rules:
a) The supplementary nature of the IAS applies exclusively when there is no specific standard issued by the IMCP.
b) For a NIC to be applied as a supplementary Mexican accounting principle, it must have been issued by the IASC as final.
c) When an accounting principle is issued by the IMCP on a subject for which a NIC has been applied supplementally, the first will replace the NIC as it comes into force.
d) The CPC considers of utmost importance to avoid that in practice informal accounting treatments are given or without theoretical support, on particular aspects or specialized industries, not foreseen by our legislation or by the IAS. For this reason, when in these circumstances not foreseen by either, the supplementary nature will be given with the body of accounting principles that is considered most appropriate in such circumstances provided that it comes from a formal and recognized set of rules.. The foregoing will be subject to not contravening the philosophy and general concepts of the bulletins and circulars issued by the IMCP.
Bulletin A-8 became effective on January 1, 1995.
Circular No. 41 Criteria on the supplementary application of international accounting standards.
The Commission concluded that regarding the scope of applying a supplementary rule and as long as the spirit of Mexican accounting principles is not contravened:
a) The supplementary nature requires in the terms of Bulletin A-8 when the IAS contemplate a general topic, which is not covered by the Mexican accounting principles.
b) The accounting principles issued by another regulatory body are binding on a supplementary basis, only when the general issue is not covered by the Mexican accounting principles or by the IAS.
When it is considered convenient, in the event that there is a particular aspect that is covered by the IAS or some other regulatory body in relation to a general rule, that the Mexican accounting standards or the IAS do not cover, such recourse may be used. particular pronouncements, provided they do not contravene the spirit of the general rule adopted.
The effect resulting from applying a supplementary rule for the first time, should be treated as a change of a particular rule by a new normative provision.
Circular No. 45 Validity on the supplementary application of international accounting standards.
In paragraph 13 of Bulletin a-8, it says that "for a NIC to be applied supplementally as a Mexican accounting principle, it will need to have been issued by the IASC as final."
However, the IAS have an issue date that is the time when the IAS is publicly disclosed as an approved standard and an effective date, included in the standard itself, which establishes the time when it is considered mandatory.
In accordance with the foregoing, the following criteria were established, the IASs issued by IASC that apply supplementally conform to Bulletin A-8 and Circular 41 will be mandatory as Mexican accounting principles once the validity indicated in the IAS itself begins, not However, early application from the date of issue by the IASC is acceptable.
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