2024-05-10 17:36:00
The Central Bank of the Republic of Argentina (BCRA) modified accounting standards that made it a loss 44,000 million pesos in the balance sheet corresponding to 2023.
According to a press release that was known this Friday, these changes were made to adapt your numbers to international methodology. “These adjustments in terms of accounting valuation, as of December 31, 2023, meant recognition of a loss of $41,555,355 million in respect of the Non-Transferable Billsand of $2,315,415 million in respect of the Temporary Advances”specify the monetary authority in charge Santiago Bausili.
The entity explained that “the main impact of this adaptation is to be observed in the evaluation criteria of Non-Transferable Bills and Other Bills of the National Treasury in US dollars, as well as the Transitional Advances to the National Government.” And he argued that “previously, for the valuation of the two Public Sector exposures (Non-transferable Bills and Transitional Advances) the criteria “Technical Value” and “Nominal Value”, respectively, were used, two criteria that did not adopt standards accounting professionals of Argentina with them. applied to the valuation of similar credits.”
The BCRA pointed out that the recognition of the capital loss eliminates the possibility of resorting to accounting profit transfers to finance the Exchequer.
By whitewashing this calculation, which allowed the previous administration to record accounting profits that were not true, the current BCRA authorities established “with effective validity from the financial statements as of December 31, 2023 that the valuation of the aforementioned instruments will be carried out. at “amortized cost taking into account the limit of the recoverable value”, a criterion established by the current professional accounting standards of Argentina.
According to the BCRA, “the action was approved eliminate significant differences in the valuation of the aforementioned instruments with the current professional accounting standards of Argentina, reaching its objective measurement the Net Assets as a diagnosis of the initial situation inherited by the current Board of Directors.”
The regulatory adjustment revealed an annual loss of $41,555,355 million for Non-Transferable Bills, and $2,315,415 million for Temporary Advances.
“This adjustment represents the first step in presenting the financial statements based on the International Standards Financial Reporting (IFRS), as applied to financial entities in Argentina,” added the press release.
Similarly, the BCRA stated that “the aforementioned capital loss is recognised, it eliminates the possibility of resorting to profit shifting accounting (which badly reflected the true economic and financial situation of the Institution) as an alternative monetary financing mechanism for the Fund, consistent with the promise of zero deficit and the end of monetary financing.”
Henceforth, holdings of Non-Transferable Bills and Treasury Bills in dollars, as well as Temporary Advances, are calculated based on their valuation at “amortized cost taking into account the limit of recoverable value”.
This resource was used by all governments starting in 2003, although it was widely used during the government of Alberto Fernandez and also during his second presidency Cristina Kirchnerperiods in which the transfer of the profits generated by the devaluation was a common currency, since when the official exchange rate rose, the Central Bank’s holdings of Non-Transferable Bills and Other Treasury Bills in dollars – measured in pesos – grew. in the same proportion of the jump in the dollar, reported in the accounting records of the entity as a gain from the supposed administration of those public bonds in the portfolio.
Profit transfers of $2.8 trillion ($2,764,694 million) did not reach the four years of Alberto Fernández’s presidency.
#Central #Bank #revealed #loss #millions #dollars