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AEMP Warns against Misuse of Accounting Standards

La Paz, Bolivia - The Bolivian government regulatory body, AEMP, has issued a statement regarding the use of International Financial Reporting Standards (IFRS) in the country.

Permitted Use of IFRS

According to a recent report by the AEMP, while IFRS is permitted for certain companies, it is not yet mandatory for all domestic firms whose securities trade on public markets. The authority explained that only foreign companies and Bolivian national companies that are subsidiaries of foreign companies are allowed to use IFRS Standards in their consolidated financial statements.

Auditor’s Report and Basis of Presentation Footnote

The report also revealed that the auditor’s report and basis of presentation footnote states that financial statements have been prepared in conformity with IFRS Standards, but does not allow for “dual reporting” - i.e., presenting both IFRS and Bolivian GAAP financial statements.

No Formal Process for Endorsing or Adopting New or Amended Standards

The AEMP emphasized that IFRS Standards are not incorporated into Bolivian law or regulations, and there is no formal process for endorsing or adopting new or amended standards. The authority also stated that Bolivia has not eliminated any accounting policy options permitted by IFRS Accounting Standards or made any modifications to the standards.

Adoption of IFRS for SMEs Standard

The report concluded by stating that while IFRS for SMEs Standard has been adopted by the standard-setter, it is still awaiting approval by the government regulatory body. The Colegio de Auditores o Contadores Públicos de Bolivia has adopted the IFRS for SMEs Standard into Bolivian accounting standards and plans to require medium-sized companies to adopt it starting in 2016 and small and micro-sized companies starting in 2017.

Cautionary Warning

The AEMP urged companies to exercise caution when using IFRS Accounting Standards, emphasizing that there is no formal process for endorsing or adopting new or amended standards. The authority also encouraged companies to seek professional advice on the application of accounting standards in Bolivia.

Key Points:

  • IFRS is permitted for foreign companies and Bolivian national companies that are subsidiaries of foreign companies.
  • Auditor’s report and basis of presentation footnote states conformity with IFRS Standards, but does not allow for “dual reporting”.
  • There is no formal process for endorsing or adopting new or amended IFRS standards.
  • Bolivia has not eliminated any accounting policy options permitted by IFRS Accounting Standards or made any modifications to the standards.
  • IFRS for SMEs Standard has been adopted by the standard-setter and plans to require medium-sized companies starting in 2016 and small and micro-sized companies starting in 2017.

Source:

AEMP Report, October 2022