Companies operating in Brazil still have difficulties in
drafting financial statements, despite new guidelines put in
place.
Companies operating in Brazil are required to prepare financial
statements, as per Law No. 11.638/07 and Provisional Measure No.
449/08, which aligns Brazilian accounting practices to
international standards.
Financial statements include the balance sheet, income statement,
comprehensive income statement, statement in changes in net worth
position, cash flow statements, and the added value statement.
Companies under the Securities and Exchange Commission of Brazil
(CVM) standards also require explanatory notes, which assist in
interpreting information. The benefits of properly prepared
financial statements include attracting investors, finding new
funding sources, presenting results to the board and shareholders,
and market credibility.
