Travieso Evans Arria Rengel & Paz

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Rates of exchange / Valuation and recording of assets and liabilities in foreign currency

Resolution N° 16-03-01 of the Venezuelan Central Bank (VCB), published in Official Gazette N° 40.879 of 04-05-2016, established the rates of exchange prescribed in Exchange Agreement N° 35 (protected rate of exchange (tipo de cambio protegido) DIPRO or complementary floating rate of exchange  (tipo de cambio complementario flotante) DICOM) that are applicable to the valuation of financial statements and valuation and  recording of assets and liabilities in foreign currency in the accounting books:

 

According to articles 1, 2, 3, 5, and 6 of said Resolution, such rates of exchange were established as follows:

 

1) Entities of the banking, insurance, and securities market sectors: DIPRO. (art. 1)

 

2) Bonds with covered capital issued by the national public sector in foreign currency: DIPRO. (art. 1)

 

3) Institutions operating in the alternative foreign currency markets.- (i)  recording in the accounting books of securities issued by the national public sector in foreign currency, acquired for transactions in said markets: DICOM in effect on the relevant date minus 0.25%; (ii) recording in the accounting books of foreign currency held at the closing of each month, intended for serving said markets: DICOM of the last business day of the relevant month. (art. 2 and 3)

 

4) Entities other than those mentioned above.- (i) recording of assets in foreign currency in the accounting books: rate of exchange of their acquisition; (ii) recording of liabilities in foreign currency in the accounting books: rate of exchange at which the obligation was undertaken; (iii) valuation of balances and transactions: rate of exchange at which they may be settled on the date when the financial statements are made. (art. 5)

 

5) Valuation and recording in the accounting books of obligations in foreign currency associated with requests for acquisition of foreign currency up to the date of this Resolution: rate of exchange used at the time of their recording and valuation. (art. 6)

 

The former Resolution of the VCB  (N° 13-02-02, Official Gazette N° 40.109  of 02-13-2013) was expressly repealed, which resolution established the rate of exchange prescribed in Exchange Agreement Nº 14 as the rate of exchange applicable to the valuation and recording of assets and liabilities in foreign currency in the accounting books.

 

In order to access the Resolution, please click here.

 

 

“NOTE: THIS INFORMATION SHOULD NOT BE CONSTRUED AS LEGAL ADVICE ON ANY SPECIFIC MATTER AND ITS CONTENT ARE INTENDED AS A MANAGEMENT ALERT AS TO CURRENT DEVELOPMENTS IN VENEZUELA, ANY SPECIFIC LEGAL QUESTIONS REGARDING THE POSSIBLE APPLICATION OF NEW OR PROPOSED LEGISLATION TO PARTICULAR SITUATIONS SHOULD BE ADDRESSED TO TRAVIESO EVANS ARRIA RENGEL & PAZ.”