The Argentine Securities Commission Amended Accounting Regulations for Certain Issuing Companies

On October 26, 2022, the Argentine Securities Commission (CNV) issued General Resolution No. 941, unifying the criteria applicable to financial statements of issuing companies using foreign currency that have implemented an accounting policy for their preparation and submission allocating the spread of foreign exchange originated on the “Reserved Profits” and “Unallocated Results” accounts.

The Resolution approved, with minor modifications, the draft resolution proposed by Resolution No. 938, issued on August 3, 2022. in a participative procedure for rulemaking (see our comments here).

The modifications introduced by the Resolution are, mainly, the following:

• The spread of foreign exchange originated in the Reserved Earnings and Unallocated Results accounts must also present the spread differences in the sub-accounts where they originated.

• The foreign exchange spread originated in the accounts Contributed Capital, Adjusted Capital, and Legal Reserve must be accounted for to determine the limit of the Legal Reserve, comprised of 20% of the issuing company’s capital.

• The notes to the financial statements must include a detail of the spreads of foreign exchange originated in the contributed capital and capital adjustment accounts, indicating the initial balance, variation of the period, and closing balance.

Finally, the provisions set forth in the Resolution will be applicable to the first financial statements closing after its enforceability date.