Formulation and presentation of the financial statements in Uruguay

SUMMARY:

Ordinance No. 81 on “Formulation and presentation of financial statements” was agreed by the Court of Accounts of the Eastern Republic of Uruguay on December 17, 2002, for financial statements closed as of January 1, 2003.

Its application will introduce substantial modifications in the preparation and presentation of accounting information. On the other hand, it will mean a need to update knowledge in all the actors involved: those who make the records, the issuers of the financial statements, those who audit them and also the different users of said information.

Ordinance No. 81: Formulation and presentation of the financial statements in the State

Undoubtedly, this Ordinance marks a milestone in the legislation on accounting technique in public administration.

This Ordinance tries to cover various needs within the public administration, regarding the formulation and presentation of the financial statements of the sector. Thus, definitions, principles and technical concepts are incorporated, frequently used in professional practice, but which did not have, to date, a legal basis for their use in the public sphere, which generated difficulties at the time of their application.

It tends to achieve uniformity in the presentation of the financial statements, favoring comparability and consolidation.

It seeks to determine the degree of responsibility for handling the funds received. Topical topic that at the end of April, was the subject of special attention by several exhibitors at an Inter-American Regional Accounting Seminar, held in Managua. All this will result in better quality and greater transparency in the accounting information of the state.

The financial statements defined by the ordinance, comprise four aspects:

- what is an accounting statement: document that presents information on the accounting system,

- what is its content: a static demonstration of the company's assets exposing its total or partial composition to a specific date, and a dynamic demonstration of its evolution over time, - what is the objective: to present the patrimonial, economic and financial situation of the accounting unit, which must be easily understood by users, which does not mean the exclusion of relevant topics, which due to their complexity may be difficult to understand (clarity), and that they must present a faithful image of the situation and the results of the company (reasonableness).

- who are the recipients: third parties who use the financial statements to satisfy their information needs.

We are talking about what is known as general use financial statements, that is, those intended for those users, who cannot access additional information that covers their particular information needs, this requires that the preparation bases are known. This leads us to all those technical criteria used as a guide to the actions that underlie the presentation of accounting information and that are intended to adequately expose the financial, economic and financial situation of an accounting unit, that is, it leads to the existence accounting standards.

For the financial statements defined in article 3, it is established that they must be prepared according to appropriate accounting standards (art. 4) in each case, applying the order of priority and the criteria established by articles 21 to 23 of this ordinance.

We are talking about information for third parties, that is to say that there is a communication process, in which we have a sender of information and a receiver of it, which are interrelated through a message. In the framework of the Ordinance, the issuer is a state agency defined as an “accounting unit”, whose message is the “accounting statements” product of the application of a conceptual framework and norms that regulate its presentation and its formal aspects. On the other hand, the recipient is the interested third parties, in this case, we have "the citizens in general, the voters and their representatives" and also other public entities, the legislative branch and agencies that carry out oversight functions.

In its article 1, the ordinance introduces a concept not included so far in Uruguayan positive law: the accounting unit. In the first paragraph of article 1, public sector accounting units are defined as any state organization that meets a double condition:

• competence to assume rights and contract obligations: this is related to the public legal status, recognized expressly or tacitly by the Constitution, the creation laws or its Organic Letters, constituting a subject of law capable of acquiring rights and contracting obligations, and

• means to meet its objectives: this is related to the concept of heritage as a set of assets, rights and obligations, support in which the activities of the unit are developed, whose ownership can only be given if the attribute of legal status previously exists. legal.

In turn, these accounting units have two obligations: that of preparing the financial statements, and that of submitting them to the Court of Accounts.

In the second paragraph, the accounting units recognized as of December 17, 2002 are identified. They can be easily identified in the institutional organization chart of the Uruguayan state of the National Office of Civil Service (ONSC).

The first numeral of said paragraph includes the State - major public person -formed by the Legislative, Judicial and Executive Powers, the latter constituting with its ministries, which is known as central administration. Also included in this section are the Court of Accounts, the Administrative Litigation Court and the Electoral Court, known as constitutional control bodies.

The following sections detail the minor public persons, who constitute the decentralized administration, which can be both functional and territorial. In functional decentralized administration, we have decentralized services and autonomous entities, the former with less functional autonomy, and the latter with less dependence on the executive branch.

In the third paragraph, and for the sole purpose of this Ordinance, non-state or private bodies, services or entities that receive public funds or administer state assets are considered accounting units (arts. 138 and 160 of the Ordered Accounting Text and Financial Administration-Tocaf)

As a general principle, the units included in article 1, which must present their financial statements to the Court of Auditors, must apply the rules and criteria established in this Ordinance No. 81 as required.

Two exceptions to this general principle are raised:

the institutions included in Decree-Law No. 15,322, which will be governed by the regulations issued by the Central Bank of Uruguay, and upon formal and founded request of the accounting unit in each financial year, the Court of Accounts shall have the power to authorize with exceptional and solely for that exercise, the non-application of the rules and criteria of this Ordinance.

The Ordinance presents two fundamental hypotheses: 1) the accounting according to the accrual or accumulation criteria, but before the formal and founded request of an accounting unit, the Court of Accounts may exceptionally authorize the presentation of the financial statements prepared according to the criteria of the perceived or cash, and 2)

The preparation of the financial statements is done on the basis that the accounting unit will continue to operate and fulfill its legal duties for the foreseeable future, unless the administration intends to liquidate the activity or discontinue its operations or there is no other possibility..

It refers to the recognition, incorporation process in the financial statements, of those items that meet the definitions of assets, liabilities, equity, income or expenses. S

Without losing sight of materiality, for an item to be recognized in the financial statements it must have an economic effect and have a cost or value whose measurement is free from material error and bias.

It is necessary that they be registered not only by their legal form, but also in accordance with their substance and economic reality, and a certain degree of caution should be used when making the corresponding estimates.

The absence of recognition cannot be substituted by alternative means such as explanatory notes or material or the description of the accounting policies followed.

At the doctrinal level, there is a wide range of valuation criteria. Of these, the Ordinance chooses two: historical cost or current value, and leaves the criteria to be used to the accounting unit. The change thereof can only be done with the express authorization of the Court of Accounts.

The concept of capital to be maintained must be linked to the objectives of the financial statements, and use the one that allows obtaining the most appropriate information for the needs of the users.

This definition is related to the concept of profit, being the reference point to measure the result; allowing to differentiate what is profitability from what is equity recovery. There are two concepts of capital to maintain recognized by the ordinance: operating and financial, the accounting unit is allowed to define the concept of capital to be maintained that best suits its reality, but once a concept is adopted, it cannot be modified unless expressly authorized by the Court of Accounts.

The concept of the restatement of the financial statements for the variation in the purchasing power of the currency is incorporated, which is commonly known as inflation adjustment. Undoubtedly, this incorporation will produce a substantial improvement in the quality of the State's accounting information. There were no regulations of this rank in the country that provided for this point, not even in private activity. In this regard, we must remember the efforts by the College of Accountants, Economists and Administrators of Uruguay to implement the restatement of financial statements, by issuing Statement No. 14 "Financial Statements adjusted for the variation in the purchasing power of the currency ”, approved on December 22, 1999.

In Uruguay, various price indices are compiled and presented. The Ordinance avoids a possible discussion on which price index to use, establishing that it will be the producer price index of national products. The methodology of IAS nº 29 “Financial information in hyperinflationary economies” must be applied, but we also speak, where appropriate, of Nicsp nº 10 “Presentation of financial information in a hyperinflationary economy”, which basically contain the same provisions.

The Ordinance proposes an adjustment as an integral part of the accounting of the accounting unit and not as a complementary accounting statement. Therefore, it requires the recording of such adjustments as another item or transaction in the accounting cycle of the agency. The Court of Accounts may exceptionally authorize the presentation of the financial statements in historical values, or the use of specific adjustment indices. To do this, you must mediate a formal request from the accounting unit, based on duly founded reasons.

Article 11 established that the accounting standards appropriate to each case should be applied in the preparation of the financial statements. In articles 21 to 23, those accounting standards are detailed, and the order of priority of the same.

Article 21 establishes a general order of application:

This Ordinance and those that are agreed in the future, substitutes or modifications thereof, must be considered first.

Secondly, Decree 103/991 of 02/27/1991 regulating art. 91º of Law 16.060 on Commercial Companies.

Thirdly, international accounting standards should be considered, both those issued by the International Accounting Standards Board (IASB) and by the International Federation of Accountants (IFAC).

Today the International Accounting Standards Board (IASB: International Accounting Standard Board) is an independent private professional body, created in 1973 in order to achieve consistency in accounting principles used by issuers of accounting information around the world.

To date, the IASB has approved 41 Nics - of which 34 are in force -, 32 Sics - from which Sic 4 has been withdrawn - and a Conceptual Framework for the Preparation and Presentation of Financial Statements. This set of standards regulates the valuation and disclosure aspects of the financial statements, covers a large part of the information requirements, and enables their comparability.

On the other hand, the International Federation of Accountants (IFAC), also based in London, was founded in 1977. It is currently made up of 155 organizations from 113 countries representing around 2,400,000 accountants. IFAC's objective is the development and progress of the accounting profession, with the capacity to provide high-quality services at all times for the benefit of the public interest.

The Public Sector Commission (PSC), is a permanent commission of the IFAC council constituted to deal in a coordinated world, about the needs of all those who are involved in financial information, accounting and auditing of the public sector. In this regard "public sector" refers to national, regional (eg, state, provincial, departmental or territorial governments), local (eg municipal governments) and related government entities (eg agencies, councils, commissions and companies).

The Public Sector Commission has so far issued 20 International Public Sector Accounting Standards

We emphasize that the ordinance simply says "issued", not incorporating the texts of the NICs and the NICsp, nor indicating the source or publication of consultation. Therefore, any publication that contains the current regulations approved by the respective body, will be valid. Remember that, in both cases, the official language is English

In all the IPSAS, it is expressly clarified that these apply to all public sector entities, except public companies.

It is also established that public companies must comply with the IAS issued by the International Accounting Standards Board (IASB).

The Nicsp nº 1 “Presentation of financial statements” in its number 6, defines the public company as “the entity that meets all the following characteristics:

a) it is an entity that has the power to contract in its own name, b) has been assigned the financial and operational authority to carry out a business, c) in the normal course of its business, sells goods and services to other entities that include a profit or the recovery of their total cost, d) it does not depend on continuous financing from the government to remain a going concern (except in the case of the purchase of products under free market conditions); and

e) is controlled by a public sector entity. ” That is why the Ordinance conditions the application of one or another type of standard (Nic and Nicsp) according to "the accounting unit in question"

If the case raised is a controversial situation or is not contemplated in the regulations mentioned in the previous article, the provisions of article 22 of the Ordinance will be considered as elements of consultation in a second order of priority. According to the same, the order of reference will be:

first, the pronouncements of the College of Accountants, Economists and Administrators of Uruguay (CCEAU). Secondly, doctrinal opinions regarding the topics under consideration may be consulted, mainly when they appear in prestigious academic publications.

In third order, the recommendations of the Inter-American Accounting Conferences (CIC), one of whose areas is that of government, will be taken into account.

In fourth order, the resolutions of the Economic Sciences Conference of the Southern Cone, which succeeded the Rioplatenses Economic Sciences Conference between professionals from Argentina and Uruguay, may be considered.

Finally, the statements on the subject, issued by professional organizations from other countries, will be taken as a reference.

In article 23, the selection procedure is established for the case in which within a same group of those mentioned in articles 21 and 22, there is more than one different criterion, applicable to the same topic. In that case, the criteria of most generalized use in our country and those that best suit the particular characteristics of the matter under consideration should be applied.

The Ordinance solves a situation that has been the product of various treatments over time: contributions to general income, subsidies received (operating, investment, debt services), subsidies and capital contributions.

These for a long time were treated as results, which led to the information presented not being a faithful image, mainly in deficit organisms, since in these cases the corresponding loss was not shown. The solution proposed then, is to account for said transfers in one direction or another as patrimonial movements, which must be registered when the transfer is effective. Let us also remember that in the case of transfers to general income, they must be disclosed by note to the financial statements, as contained in paragraph e of article 2 of Law No. 17,040.

At the doctrinal level, the conceptualization of the accounting model is made based on the definition of four elements: the unit of measurement, the valuation of assets and liabilities, the capital to be maintained and the concept of profit realization. Accordingly, and considering the provisions of this Ordinance, the accounting model for public administration is defined by:

- unit of measure: currency of closing purchasing power (art.9), - valuation of assets and liabilities: acquisition cost or current values (art.10), -capital to be maintained: operating (or physical) or financial (or monetary) capital (art.8), which in turn is associated with the concept of determining the result, which differs according to the definition of adopted capital.

- realization of the profit: although the ordinance does not establish it, it is related to the previous definitions, and we can establish that the realization of the profit is associated with the existence of a transaction, and we must consider the inclusion as results of the exercise of increases in equity from valuations of assets and liabilities, according to the capital criteria to be adopted.

In order to allow comparability, the consistent and uniform application of the criteria used in the presentation and classification of items and in the valuation methods is proposed. However, a change in the activity of the organism, a modification that provides a more appropriate presentation of the economic facts, the appearance of an accounting standard that forces the change, may be reasons for a permitted modification. In all cases, the changes must observe certain formalities:

• must be based on reasoned and reasonable grounds, • require the express approval of the authorities of the organization, • must be reported in the notes to the financial statements, • The incidence of the change in equity and results must be expressed.

Given the diversity of filing deadlines in some cases and the absence thereof in others, the Ordinance requires the presentation of the financial statements and other complementary information, within a maximum period of ninety (90) days from the closing date. The exercise.

The presentation of the financial statements must be formalized in a file containing the following documents:

- a note addressed to the President of the Court of Auditors, - three copies of the financial statements, with all the channels duly signed by the highest authorities of the body, the financial statements on which the Court of Auditors must issue its opinion, must be the publication statements, - non-state public persons and private bodies that manage public funds or administer state assets, must also submit the summary statements for the purposes of their approval and publication, - authenticated copy of the minutes of the management body in which the result of the exercise and the approval of the financial statements are recorded, - when compiling the financial statements in accordance with the provisions of this ordinance, the compilation report that establishes number 3 of article 2 of decree no. 103/991 of 02/27/1991 will not be required, - the management representation letter, also known as the management letter, management letter or representation letter (section 580 - International Standard on Auditing 22 - Administration representation or statement, IFAC), must contain a confirmation the agency's written statement regarding the statements included in the financial statements; in which they acknowledge their responsibility for the correct presentation of the same and for the disclosures of matters that have a material effect on them and of any other significant event that occurred during the year, including the events subsequent to the closing and until the presentation of the statements before the Court of Accounts.

The following statuses or reports must be submitted in the file:

- the report: it is a document that must accompany the financial statements, in which the heads of the unit report on all those points that are considered of interest, and that ultimately allow obtaining better information on the progress of the organism.

- statement of financial position

- Statement of income

- State of origin and application of funds with the concept of funds equal to cash or cash equivalents, a concept that is identified with that of availabilities established by Decree No. 103/991. By means of a formal request from the accounting unit and based on duly founded reasons, the Court of Accounts may exceptionally authorize the presentation of the state of origin and application of funds with the concept of funds equal working capital.

- When presenting the aforementioned statements, they must be accompanied by the figures from the statements of the previous year. Since the financial statements must be restated, the financial statements of the previous year must have all their figures at the closing values of the year being presented, by applying the price index for the period.

- state of evolution of equity

- table of fixed assets, intangibles, real estate investments and amortizations

- Annex discriminating the public funds received and the expenses covered with them, in the case of the entities included in articles 589 of Law n ° 15.903 and 199 of Law n ° 16,736 (articles 138 and 160 of Tocaf).

The financial statements must be accompanied by the notes that must be at least those indicated in Decree No. 103/991 of 02/27/1991 and in Law No. 17,040 of 11/20/1998, but those mentioned in "Presentation of financial statements" (Nic 1 paragraphs 91 to 102, and Nicsp 1 paragraphs 122 to 135), and all those specifically established in other international accounting standards, both private and public, and changes in criteria as established in art. 12 that we already saw.

The parastatal social security funds must present a technical study that projects the present situation based on an actuarial and financial analysis, indicating the assumptions and hypotheses used in its preparation. This study must be less than five years old at the date of its presentation.

The basis of all this scaffolding, are the reliable accounting records. Articles 81 to 91 of the Tocaf - Chapter I "The Registry" - establish the requirements to be met by the State's accounting records. The Ordinance contemplates any means of registration and defines accounting records as the documents or media in which accounting information is recorded, filed or displayed.

As we can see, it refers to both the physical documentary basis and the technical means used for registration, considering these elements as the material means used to go from a given transaction to an accounting report. This article empowers the Court of Auditors to determine if the documentation that supports the transactions is correctly deeded, preserved, presented in the form of financial statements and exposed accordingly.

These modifications will be applied in the fiscal years with a closing date of December 31, 2003 or later, which means that as of that date, the financial statements presented must comply with all the provisions established by this ordinance. But due to accounting methodology reasons, for example regarding the adjustment for inflation, in the preparation of the statement of origin and application of funds, in the determination of the result, etc., it is necessary to start from the statement of financial position as of December 31 2002 reworked in accordance with the provisions of the ordinance.

The reworking of the financial statements as of December 31, 2002, must be carried out from the available statements, and by means of an adaptation of their values to the closing currency according to the criteria established by the ordinance regarding the concept of capital to be maintained. and valuation criteria, a decision that the accounting unit must adopt, and that once adopted cannot be modified without authorization from the Court of Accounts. When using the accrual method, we must reconvert the available information (normally prepared on a “box” basis) and express it in the new basis indicated.

Undoubtedly, this Ordinance marks a break in what is the presentation of accounting information in the public administration. Not only is it the most extensive standard issued by the Court of Accounts, since the first ordinance of October 28, 1933, but in our opinion, it is part of a small group of regulatory standards, which support and enhance each other, and that they are of undoubted importance and impact on the state's information systems.

The incorporation of norms, principles and procedures carried out by the Ordinance, has no antecedents in our positive law, both in the breadth of concepts and their quality, which will lead to a significant improvement in the information quality standards. State accounting and in the transparency of national accounts.

Public administration is placed in an advanced position not only in the international arena, but even exceeds the provisions that are in force in our country for its application in private activity.

But this is not the end in itself, it is only the beginning of a long-term process and not a few difficulties. From the ordinance, manuals and instructions must be implemented on behalf of the General Accounting Office of the Nation, since procedures and practical guidelines for action must be specified to facilitate its application.

Among other situations, registration and information systems must be adapted and harmonized, sufficient physical and technical resources will be required, the human resources involved at different levels must be trained, and a sanctions regime must be implemented for non-compliance with the provisions of the ordinance.

Ordinance No. 81 COURT OF AUDITORS OF THE

Formulation and presentation of the financial statements

(Approved in extraordinary session of December 17, 2002)

Seen: the need to establish the criteria, rules and procedures for the formulation of the Financial Statements that must be submitted to the Court of Accounts in compliance with constitutional, legal or regulatory provisions.

Being: 1) that Article 211 Literal C) of the Constitution of the Republic, establishes that the Court of Auditors is responsible for: "Deciding and Reporting on the Accountability and management of all State Bodies, including Departmental Governments, Entities Freelancers and Decentralized Services, whatever their nature ”;

2) that Article 94 Numeral 3) of the Ordered Text of Accounting and Financial Administration (TOCAF) establishes that it corresponds to the Court of Accounts: “To report and report on the Balance of Budget Execution and Accountability that must be formulated by the Executive Power and the Departmental Governments, as well as the Situation, Results and Budget Execution States formulated by the Autonomous Entities and Decentralized Services ”;

3) that Law No. 17,040 dated November 20, 1998, in its Article 1 establishes that public or state-owned companies, with commercial and industrial activity, will publish their balance sheet, expressed in the States of Patrimonial Situation and Results, prepared in accordance with the provisions of Articles 88 to 92 of Law No. 16,060 of September 4, 1989;

4) that Article 589 of Law No. 15.903 of November 10, 1987 (Article 138 Literal D) of the TOCAF) establishes that the Non-State Organizations, Services or Entities that receive public funds or administer State assets, must formulate and present the different documents and States referred to in Literals B) and C) of said Article, in the manner determined by the Court of Accounts;

5) that Article 199 of Law No. 16,736 of January 5, 1996 (Article 160 of TOCAF) establishes that non-state public persons and private Organizations that handle public funds or administer State assets, will present their Financial Statements, with an external audit opinion, before the Executive Power and the Court of Accounts;

Considering that Article 211 Literal F) of the Constitution of the Republic establishes that the Court of Accounts is responsible for issuing Accounting Ordinances;

Attentive: to what is stated above;

THE COURT AGREES

Area of application

1) Defined as Public Sector Accounting Units, obliged to prepare Financial Statements and present them before the Court of Accounts, all state organizations with competence to assume rights and contract obligations, and with the means to fulfill their objectives.

As of the date of issuance of this Ordinance, the following accounting units are recognized:

1. State, senior public person, comprising the Legislative, Executive and Judicial Powers, the Court of Accounts, the Administrative Litigation Court and the Electoral Court.

2. The Decentralized Services: Antel, National Port Administration, National Postal Administration, Ose and Iname.

3. The Autonomous Entities: Banco Central del Uruguay, Banco de la República Oriental del Uruguay, Banco de Seguros del Estado, Banco Hipotecario del Uruguay, Instituto Nacional de Colonización, Banco de Previsión Social, Ancap, Ute, Afe, Universidad de la República, Anep, and Pluna.

4. Departmental Governments

For the purposes of this Ordinance, non-state Organizations, Services or Entities that receive public funds or administer State assets, included in Article 589 of Law No. 15.903 of 11/10/987 (Article 138) are considered accounting units. of TOCAF) and private organizations defined in Article 199 of Law No. 16,736 of January 5, 1996, (Article 160 of TOCAF);

2) The rules and criteria established in this Ordinance will be mandatory for the Financial Statements that must be presented to the Court of Accounts. At the formal request of the Accounting Unit, the Court of Accounts may exceptionally authorize the non-application of the provisions of this Ordinance for each Fiscal Year. The institutions that are regulated by the norms issued by the Central Bank of Uruguay will be governed by the provisions of this Ordinance to the extent that they are applicable.

Conceptual framework

3) Financial statements (or financial statements) are considered the documents that expose the information emanating from the accounting system of an entity and that refers to its assets with respect to its total or partial composition at a given moment and its evolution over time, basically intended to present to third parties the financial, economic and financial situation of an accounting unit.

4) Accounting standards are understood as all those technical criteria used as a guide to the actions that underlie the presentation of accounting information and that are intended to adequately expose the financial, economic and financial situation of an accounting unit.

5) The Financial (or Financial) Statements must be prepared applying the accrual criteria. According to this criterion, transactions and other events will be recognized when they occur according to legal regulations or commercial practices, regardless of when money or another equivalent to cash is received or paid.

The Court of Accounts may exceptionally authorize the presentation of Financial Statements (or financial statements) prepared applying the criteria of what is received or cash when there is a formal request from the accounting unit based on well-founded reasons.

6) The Financial (or Financial) Statements must be prepared on the basis that the accounting unit that issues them is in operation, and will continue its operations activities for the foreseeable future. Therefore, it is assumed that it has no intention or need to significantly liquidate or discontinue the scale of its operations. If such intention or need exists, it will be disclosed by means of a Note to the Financial (or Financial) Statements informing regarding the basis used in the preparation thereof.

7) Any act, operation or fact that has any economic effect for the accounting unit that issues the Financial (or Financial) Statement and that has a cost or value that can be measured reliably, must be incorporated into those Statements. The lack of recognition of the same, cannot be replaced by describing the accounting policies followed, nor by means of notes or other explanatory material.

The accounting unit must define the concept of capital to be maintained (operational or financial) in order to determine the results. Once a definition is adopted, it cannot be modified without the express authorization of this Court.

9) The Financial Statements (or financial statements) must be presented in the currency of purchasing power at the end of the Fiscal Year, for which the guidelines established in Article 14 will be followed.

10) The accounting unit must define the valuation criteria to be used (acquisition cost or current values). Once a definition is adopted, it cannot be modified without the express authorization of this Court.

11) The Financial Statements (or financial statements) must be prepared according to accounting standards appropriate to each case, applying the provisions of Articles 21 and 22, so that they clearly and reasonably expose the financial and equity situation and the results The exercise.

12) In preparing the Financial Statements (or financial statements) corresponding to each Fiscal Year, the same accounting criteria and the same valuation methods used in the preceding Fiscal Years will be followed. Any variation in this regard must be reasonably founded and expressly approved by the competent authorities of the body and expressed in notes to the Financial (or Financial) Statements. In the event of a change in criteria, the incidence that they may have had on the equity and the results must be exposed.

Presentation of Financial Statements

13) The Financial (or Financial) Statements and complementary information that must be presented to the Court of Accounts are as follows:

Equity Statement

Statement of income

State of Origin and Application of Funds

State of Evolution of Equity

table of fixed assets, intangibles, real estate investments and amortizations

annex discriminating the public funds received and the expenses covered with them, in the case of the entities included in Articles 589 of Law N ° 15.903 and 199 of Law N ° 16,736 (Articles 138 and 160 of TOCAF.

The Financial (or Financial) Statements must be presented accompanied by the corresponding Notes.

14) The Financial Statements (or financial statements) must be formulated in national currency expressed in the currency of purchasing power at the close of the Fiscal Year, applying for this purpose the methodology established in the International Accounting Standard No. 29. The adjustment index to be used will be the Producer Price Index for National Products (prepared by the National Statistics Institute). The adjustments made for the restatement of the items included in the Financial Statements (or financial statements) must necessarily be recorded in the accounting.

The Court of Accounts may exceptionally authorize the presentation of Financial Statements (or financial statements) at historical values. You may also authorize the use of other adjustment indices representative of the change in the purchasing power of the currency. In all cases, there must be a formal request from the accounting unit based on well-founded reasons.

15) The authorities of the accounting units must present an explanatory memorandum of the Financial (or Financial) Statements, informing about all the points of interest.

Especially it will be established:

a) The reasons for significant variations operated in the asset and liability items.

b) An adequate explanation of the extraordinary gains and losses and their origin and of the adjustments for gains and losses of previous years, when they are significant.

c) The reasons for establishing the constitution of reserves, clearly and circumstantially explained.

d) Explanation or guidance on the prospect of future operations.

e) The relationships with related, controlled or controlling entities and the variations operated in the respective participations and in the credits and debts.

This Article will not be mandatory in the case of the entities included in Literal B) of Article 589 of Law No. 15.903 of 11/10/987 (Article 138 of TOCAF).

16) The Statement of Financial Situation must present the financial situation of the accounting unit as of the closing date of the Fiscal Year and will present the asset, liability and equity accounts, with a degree of detail that is sufficient to allow a judgment on the composition of the patrimony to said date and on the value of the elements that integrate that State.

17) The Income Statement for the Fiscal Year must indicate, separately, the results originated in the ordinary activity of the accounting unit and those derived from extraordinary operations verified during the Fiscal Year, discriminating the positive and negative balances of the items to the extent necessary to allow a clear judgment on its amount and concept.

18) For the preparation of the State of Origin and Application of Funds, the concept of funds equal to cash and cash equivalents must be used.

The Court of Accounts may exceptionally authorize the preparation of the State of Origin and Application of Funds using the concept of funds equal to working capital, when there is a formal request from the accounting unit based on well-founded reasons.

19) The Statements of Financial Situation, Results and Origin and Application of Funds for the Fiscal Year must be presented in comparative form with those of the previous one, both expressed in the closing currency of the Fiscal Year presented.

20) The Parastatal Social Security Banks must include in the notes accompanying the Financial Statements, a study of the actuarial and financial situation of the Institution as well as the basis for its preparation, which must not be older than five years.

Accounting Standards

21) The accounting standards to be applied for the formulation and presentation of the Financial Statements (or financial) will be in order of priority as follows:

Those established by this Ordinance of the Court of Accounts and those issued in the future.

Decree 103/91 of February 27, 1991.

International Accounting Standards (IAS) issued by the International Accounting Standards Board (IASB) or International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants (IFAC), according to the accounting unit of in question.

22) In those controversial situations or not contemplated in the norms included in Article 21), the following will be taken in order by order:

The pronouncements of the College of Accountants, Economists and Administrators of Uruguay, issued with the advice of its specialized committees and approved by the Board of Directors.

The most widely received doctrine, especially when it has been developed through recognized and coinciding texts and treatises on the points in question.

The Resolutions of the Inter-American Accounting Conferences and the pronouncements of the Inter-American Accounting Association;

The Resolutions of the Conference of Economic Sciences of the Southern Cone and its predecessor, the Rioplatense Conference of Economic Sciences;

The pronouncements of professional bodies from other countries.

23) In the event that there are various criteria within the same group of those mentioned above, applicable for the same purpose, it will be necessary to select and use those that are most widely used in our environment and best suit the particular circumstances of the case. considered.

24) The contributions that the accounting units make to General Income must be treated for accounting purposes as a decrease in equity, unless legal provisions to the contrary.

Subsidies received by accounting units (operating, investment, debt services), subsidies or capital contributions, both from General Revenue and from any public body, should be treated as increases in assets. The same treatment will be given in cases of cancellation or remission of debts.

The equity increases and decreases derived from the aforementioned must be recognized at the time the transfer is effective.

Formal aspects

25) The Financial or Financial Statements must be based on reliable accounting records. Accounting records are those documents or media in which accounting information is written, filed or displayed, whatever the means of registration used.

26) It is understood that accounting records are formally reliable when there are sufficient objective elements that, in the opinion of the Court of Auditors, allow us to conclude that the documentation that supports the operations is adequately registered, filed, compiled, summarized and exposed.

27) All the Financial Statements (or financial statements) must be sent in three ways, duly signed by the entity's Chief Hierarch, the Secretary General, if any, and the General Accountant thereof, accompanied by a Note addressed to the President of the Tribunal of counts.

28) An authenticated copy of the Act of the Management Body in which the aforementioned Financial Statements (or financial statements) and the corresponding letter of representation of the administration were approved must also be attached.

It must be recorded in the aforementioned Minutes of the Result of the Exercise that is approved.

29) The compilation report provided by Decree 103/91 of February 27, 1991, will not be required when presenting the Financial Statements (or financial statements) by the accounting units included in this Ordinance.

30) The Financial Statements (or financial) that correspond to publish in application of the provisions of Article 191 of the Constitution of the Republic and by Law No. 17,040 dated November 20, 1998, as well as the respective Laws Organic of the required accounting units, must be those sent to the Court of Accounts for its Opinion.

31) The Organisms mentioned in Article 199 of Law N ° 16,736 of 5/1/996 (Article 160 of TOCAF), in addition to the States mentioned in Article 13 of this Ordinance, must remit to this Court the States summarized to the effects of its approval and publication.

32) The accounting units included in this Ordinance, must present the Financial Statements (or financial statements) and complementary Reports within the ninety days following the closing of the Fiscal Year before the Court of Accounts, unless by legal provision another term is established.

33) This Ordinance will begin to apply for the Exercises beginning on January 1, 2003.

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