New Simple Regulation - Brazilian Accounting Foundation

Overview

The New Simple Regulation (NSR) is a comprehensive set of accounting standards issued by the Brazilian Accounting Foundation (BAS) in 2021. The NSR is designed to simplify and modernize the accounting framework in Brazil, making it more accessible and easier to understand for both preparers and users of financial statements.

The NSR is based on the International Financial Reporting Standards (IFRS), but it also includes some unique features that are tailored to the Brazilian context. For example, the NSR allows companies to use the cost model for the valuation of inventories, which is not permitted under IFRS.

The NSR is a significant change from the previous accounting framework in Brazil, and it is expected to have a major impact on the way that companies prepare and report their financial statements. The NSR is also expected to make it easier for Brazilian companies to raise capital in international markets.

Key Features of the New Simple Regulation

The NSR has a number of key features that make it more simple and user-friendly than the previous accounting framework in Brazil. These features include:

• A simplified chart of accounts: The NSR uses a simplified chart of accounts that is based on the IFRS chart of accounts. This makes it easier for companies to prepare their financial statements and to compare their financial results with other companies.
• Reduced disclosure requirements: The NSR reduces the number of disclosures that companies are required to make in their financial statements. This makes it easier for users of financial statements to find the information they need.
• More flexibility in the application of accounting principles: The NSR gives companies more flexibility in the application of accounting principles. This allows companies to tailor their accounting policies to their specific circumstances.

Benefits of the New Simple Regulation

The NSR has a number of benefits for both preparers and users of financial statements. These benefits include:

• Reduced compliance costs: The NSR reduces the compliance costs for companies by simplifying the accounting framework and reducing the number of disclosures that are required.
• Improved comparability: The NSR makes it easier for users of financial statements to compare the financial results of different companies. This is because the NSR uses a simplified chart of accounts and reduces the number of disclosure requirements.
• Increased transparency: The NSR increases the transparency of financial statements by requiring companies to disclose more information about their accounting policies and their financial performance.
• Enhanced decision-making: The NSR provides users of financial statements with the information they need to make informed decisions about companies. This is because the NSR simplifies the accounting framework and reduces the number of disclosure requirements.

Conclusion

The NSR is a significant change from the previous accounting framework in Brazil, and it is expected to have a major impact on the way that companies prepare and report their financial statements. The NSR is also expected to make it easier for Brazilian companies to raise capital in international markets.

If you are a preparer or user of financial statements in Brazil, I encourage you to learn more about the NSR. The NSR is a valuable resource that can help you to improve the quality of your financial statements and to make better decisions about companies.