inflation Adjustment

The Argentine Federation of Professional Councils of Economic Sciences

(FACPCE) concluded that the accumulated inflation rate in the last 3 years

exceeded 100%, which is why it determined that the application of the

inflation adjustment should begin.

In this context, the Board of Directors of our Professional Council issued

resolution 107/2018 which establishes that RT 6 will have mandatory

application for the preparation of financial statements

corresponding to annual or intermediate fiscal years closed as of July 1,

2018 (including ).

The aforementioned regulations establish that an entity may choose, for a

single time, not to make the adjustment for inflation of the financial

statements corresponding to the annual years closed between July 1 and

December 30, 2018 (both dates inclusive) or the financial statements

corresponding to intermediate periods closed between said dates. In such

case, you must apply RT 6 in the first subsequent closing (annual or

interim) to the one in which you should have adjusted for inflation, but

decided to use the option not to do so; with retroactive effect to the

beginning of the comparative year and without enjoying the possibility of

applying certain exemptions provided for in points 3.2 to 3.4 of resolution

539/2018 of the FACPCE Governing Board.

At the beginning of April, the Board of Directors of our Council issued

resolution 11/2019, through which it introduced modifications to the second

part of resolution 107/2018, extending some simplifications and interpreting

others already granted. It is worth clarifying that resolution 107/2018

adopted the second part of resolution 539/2018 of the FACPCE, which

establishes that the “rules for the financial statements to be expressed in

closing purchasing power currency in a context of inflation in the terms of

section 3.1 of RT 17 and section 2.6 of RT 41, applicable to fiscal years or

intermediate periods closed as of July 1, 2018.”

Comptroller bodies

National Securities Commission (CNV): resolution 777/2018 establishes

in point 1 of article 3 that issuing entities subject to the supervision of the

Commission must apply the method of restatement of financial statements

in homogeneous currency, as established. established by IAS 29 or RT 6 as

appropriate and that for those issues not specifically addressed in the

aforementioned standards, the FACPCE application guides may be used.

General Inspection of Justice (IGJ):Resolution 10/2018 establishes in its

article 2 that article 312 of resolution 7/2015 of the IGJ is replaced and in

its title "restatement in homogeneous currency" defines that the financial

statements corresponding to complete financial years or intermediate

periods must be presented expressed in homogeneous currency and that for

the purposes of the restatement of the financial statements, the standards

issued by the FACPCE and adopted by our Board will be applied.

National Institute of Associativism and Social Economy (INAES):

resolution 419/2019 establishes in its article 1 that the financial statements

of cooperatives and mutual societies, whether annual, for intermediate or

special periods, that close as of March 31, 2019 Including, they must be

presented expressed in constant or homogeneous currency, applying the

restatement methodology established in RT 6, in accordance with resolution

539/2018 and the application guides of the FACPCE (and provided that it is

not contrary to the provisions of the resolution of the INAES). In its article

2, it establishes that for the financial statements of cooperatives and mutual

societies, whether annual, for intermediate or special periods, that close

between December 31, 2018 and March 30, 2019, their presentation in

currency will be accepted. constant or homogeneous applying the

methodology provided for in the aforementioned article 1.

National Insurance Superintendence (SSN): resolution 118/2019

establishes in its article 1 that the financial statements corresponding to

complete financial years or intermediate periods must be presented

expressed in currency homogeneous and in its article 2 that it will be

applicable to the financial statements as of June 30, 2019 and following.

Central Bank of the Argentine Republic (BCRA): communication “A”

6651 establishes that the inflation adjustment will be applicable to financial

entities and exchange houses subject to the control of the Central Bank for

financial years that begin on or after 1 January 2020.

Secretariat of Entrepreneurs and Small and Medium Enterprises

(SEPYME): paragraph 1 of article 14 of Resolution 383/2019 establishes

that the presentation of financial statements in homogeneous currency will

proceed for financial years that begin on starting January 1, 2022.