Fostering market transparency
The BNDES understands the importance of precise, timely, transparent and reliable information for an efficient, dynamic and broad market, in which investments do not need to take inadequately measured risks. For this reason, much like other development banks, the BNDES has participated actively in the global process of adopting international accounting information standards. This is possible due to its performance as a facilitating agent and by promoting discussions, dissemination of knowledge, financial support, follow-up of the effects and trends, as well as using its influence to encourage the adoption of the IFRS (International Financial Reporting Standards).
Among the various fronts in which the BNDES has been operating, the following are worthy of mention:
ABDE (Brazilian Development Bank Association): coordination, since 2009, of the Accounting Affairs Committee with the objective of: (a) disseminating knowledge; (b) assisting smaller branches in their individual migration to the IFRS; (c) forwarding particularities and difficulties faced by these institutions to regulating agencies. Over the last four years, the BNDES has organized and held lectures on the subject at annual ABDE meetings.
National Treasury/Governmental Agencies: the BNDES is monitoring the National Treasury’s implementation of international accounting standards in the public sector, with a deadline set for 2012 (federal and state governments) and 2013 (municipalities), with the goal of structuring a support plan/financing program for this process.
CVM (Securities Committee): a seminar held together with CVM, summoning open-capital company directors in order to alert them about how to improve the market so as to receive information from the IFRS and avoid investor speculation and insecurity.
CReCER Group (Accounting and Responsibility for Regional Economic Growth): a group created by the World Bank and the International Federation of Accountants (IFAC) to assist in and monitor the implementation of the IFRS in Latin America. Since its creation in 2007, the BNDES has been an active member, participating in all annual conferences. This participation has been of extreme importance inasmuch as it allows for an exchange of experiences between the countries.
IFRS for small and medium-sized companies: one of the areas for application of the IFRS in which the BNDES has been required more. This demand is justified by the potential impact, probably greater than the migration of public companies, publicly-traded companies and/or financial institutions to the new accounting standards. This is because the latter have always had strong regulators (CVM and the Central Bank) establishing a set minimum for transparency and formality. For small companies, however, the change will be from practically inexistent regulation to high-standard, formal regulation. In a partnership with the Federal Accounting Council (CFC), in 2010, the BNDES promoted two seminars to train professionals in this segment, which were a success in terms of attendance. They were broadcast on two TV channels via Internet, and more than 14,000 people took part online, involving more than 100 cities abroad. The CFC formally requested the BNDES’ support to multiply this training throughout Brazil and also extend it to a few Portuguese-speaking countries in Africa, which had requested it. To maximize the results in this segment, the BNDES has already begun discussions on a possible agreement, not only with the CFC, but also with the Sebrae in Brazil, confederations, the S system, the Brazilian
Institute for Cooperative Governance (IBGC) etc.
IFAC (International Federation of Accountants): responsible for the international auditing standards and the international accounting standards for the public sector. The BNDES is the only Brazilian representative on this advisory board.
GLASS (Group of Latin-America Accounting Standard Setters): an agency created during the latest CReCER meeting with the objective of strengthening Latin America’s position in the Public Consultation phase of new standards or changes to existing standards. Thus, comments from Latin American countries can be sent as a block (per country) instead of individually. The BNDES is represented in the technical department and has to maintain a team to carefully examine the minutes of the new standards, conducting tests and simulations in order to send comments, in a timely fashion, so GLASS can consolidate them.
IASB (International Accounting Standards Board): since 2006, the BNDES has participated in all annual conferences, anticipating changes and providing opinions on possible effects of adopting the IFRS in Brazilian companies. In October 2011, in a partnership with the IASB, the BNDES promoted an international conference on teaching accounting, covering what needs to be changed in the undergraduate courses, as well as in MBAs, master’s and doctorate courses in order to adapt them to the new accounting environment, including the preparation of teachers.
The event was attended by more than 900 people, among them, the most renowned specialists in teaching accounting in the Brazilian academy.
Besides this, the BNDES has committed to contributing annually to the IASB, participating in the Brazilian quota with the intent of
collaborating to preserve the standardizer’s independence.
ISAR (International Specialists in Accounting Reporting): a permanent workgroup of the United Nations’ Conference on Trade and Development (UNCTAD) focused on accounting issues. It monitors the effects of the IFRS in countries that have migrated to the international accounting standard. Lately, monitoring the IFRS up has evolved to the concept of an Integrated Global Report, which brings together the presentation of accounting information and with information on sustainability, including issues concerning the environment and corporate governance in the reports that will be presented by the global companies. The BNDES has participated actively in this group since 2007, as a member of the Brazilian delegation headed by the CVM.
IIRC (International Integrated Reporting Council): in 2011, the BNDES engaged in the Integrated Global Report initiative, in keeping with work developed by ISAR (see Transversal Policies). The BNDES’ participation takes place on three fronts: (1) as a user of new regulation, participating in the pilot test that will result in the basic conceptual structure (framework) of the new regulation; (2) as a facilitator in the development of initiatives that encourage/require the companies that it supports to apply the new regulation; and (3) as a disseminator – the link between the IIRC and the International Development Financial Club (IDFC) to stimulate the engagement of development banks and club members in the regulatory process of the
Integrated Global Report.
The BNDES firmly believes that the sum of the aforementioned initiatives will contribute to a more solid and transparent global capital markets, which is less susceptible to crises. Since 2010, the BNDES has been using the international standards when drafting its own financial statements. The main impacts are demonstrated in the IFRS section of "the BNDES in Numbers".