International Financial Reporting Standards are pronouncements issued by the International Accounting Standards Board (IASB). This set of rules ensures that financial statements of companies and government agencies in different countries use the same accounting language, providing reliability and transparency in transactions.

The Accounting Pronouncements Committee (CPC) was created in Brazil in 2005 with the objective of reducing international risks related to loans, equity investments, and other aspects that are, in some way, associated with the understanding of financial statements.

CPC Accounting Pronouncements

The CPC Accounting Pronouncements are based not only on IFRS but also on the knowledge of various Brazilian organizations, such as:

• Association of Public Companies (ABRASCA);
• Foundation for Accounting, Actuarial and Financial Research (FIPECAFI);
• Association of Capital Market Analysts and Investment Professionals (APIMEC);
• Institute of Independent Auditors of Brazil (IBRACON);
• São Paulo Stock Exchange (BOVESPA);
• Federal Accounting Council (CFC).

Additionally, the CPC is integrated with other bodies linked to accounting, the financial market, and companies in this area or those interested in financial statements, such as:

• Securities and Exchange Commission (CVM);
• Central Bank of Brazil (BACEN);
• Brazilian Federation of Banks (FEBRABAN);
• Brazilian Federal Revenue Service (SRFB);
• Superintendence of Private Insurance (SUSEP).

Brazilian Model vs. American Model

In the United States, an approach known as US-GAAP refers to a complex and very specific legislation focused on the American corporate environment.

Thus, adapting these standards to the Brazilian environment proved ineffective. In contrast, the IFRS model, widely used by other countries, began the accounting harmonization process.

What Changed with the International Accounting Standards

With IFRS, comparing Brazilian financial statements with those of any other country using the same model became easier. In the past, analyzing the financial profile of each country was extremely challenging.

One of the significant advantages of IFRS was the ability to form partnerships and close more deals with other countries freely, following the companies’ goals and interests.

As a result of greater transparency and understanding of financial statements, there was greater integration with the international business market and an increase in the efficiency of global groups, as financial discrepancies ceased to exist.

Consequently, Brazil began to attract more investors to its publicly traded companies.

How IFRS Affects Your Business in Brazil

With the globalization of business and the financial market, corporate transparency and compliance with international accounting standards are increasingly important. If you wish to invest, for example, you might discard this possibility if you find that the business does not meet these requirements.

Companies that adhere to CPC pronouncements can meet various market, investor, and interested public demands, which is essential if you are expanding your operations to Brazil.

Thus, in addition to aligning with the international accounting language implemented in Brazil, your possibilities for expansion, performance, and growth are much greater.