Introduction

The Banco Central do Brasil is taking steps towards adopting the International Accounting Standards issued by the International Accounting Standards Board – IASB, a private non-profit institution, headquartered in London, working towards the harmonization of accounting rules. Currently, both central banks and private entities follow accounting rules in effect in the country where they are located, what hinders international comparative analyses.

Adopting the IASB rules shall increase comparability of the Central Bank of Brazil accounting statements, since it will enable a better understanding of its operations by foreign entities. This shall yield the institution greater external credibility. Clearly, central banks conduct specific operations that are not contemplated by the IASB rules and therefore will need specific treatment. In order to cope with such cases, the BCB intends to observe the best accounting practices of other central banks.

The work developed by IASB is supported by the International Monetary Fund – IMF, the Bank for International Settlements ‑ BIS and the World Bank – IBRD, organisms that are encouraging corporations, governments and regulatory organizations throughout the world to adopt the IASB rules. This process is under way all over the world. One estimates that, in 2005, corporations headquartered in the European Union, listed in stock exchanges, will be using accounting statements in line with the IASB rules.

In the BCB's, the process of implementation started with the training of a team in its Accounting Department that, over the past two years, studied the IASB rules and its application. In this period, an advisory staff to deal exclusively with the issue was also hired.

Conversion of accounting statements to the IASB international standard will take place in three phases. In the first, started in March 2004, the BCB's and the consulting firm Ernst & Young will assess BCB's operations to conform them to the IASB accounting rules. One estimates that this phase will be completed by the first half of 2004.

The second phase involves adapting and reformulating the chart of accounts, the accounting procedures and the managerial systems that interact with the accounting system.

The third and last phase will be the disclosure of accounting statements according to IASB rules. The balance sheet to be closed in December 31, 2005 shall be the first to be published under the new accounting rules. In December 31, 2006, the first comparative balance sheet may be disclosed, which will be the evidence that the conversion to Iasb has been completed.