Doing Business

Doing Business in Mexico 2015

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101 Doing Business in Mexico 2015 Chapter 12 Accounting principles and practices Investor considerations • Basic financial statements usually cover two years. • In general, conformity between accounting and tax treatment of income and expense items is not required. • Until December 31, 2007, financial statements had to be comprehensively restated to reflect the effects of inflation. • The objective of the Mexican Financial Reporting Standards is to have convergence with International Financial Reporting Standards. • Public companies transitioning to IFRS. Accounting principles Beginning June 1, 2004, the Mexican Financial Reporting Standards Board (CINIF, for its initials in Spanish), assumed the responsibility for setting accounting and reporting standards in Mexico. In compliance with this responsibility and after due exposures, the CINIF has issued a large number of Mexican Financial Reporting Standards (MFRS). The main objective of the MFRS is to achieve the maximum possible harmonization and convergence of Mexican accounting and reporting standards and regulatory practices with International Financial Reporting Standards (IFRS). The full hierarchy of the MFRS, in effect beginning January 1, 2006, is as follows: • MFRS and Interpretations of MFRS issued by the CINIF. • Statements issued by the Accounting Principles Board of the IMCP that have not been amended, replaced or repealed by the new MFRS. • IFRS, when no applicable Mexican standard exists. Commencing with the year ending December 31, 2012, all Mexican public companies will be required to file their audited financial statements of the last three years, according to the Mexican Stock Exchange rules. MFRS make no distinction between large and small companies with respect either to the standards themselves or to disclosure requirements. Statements issued by the CINIF and the IMCP are applicable to all business entities. However, the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores—CNBV) sometimes issues specific rules for companies listed on the Mexican Stock Exchange. These rules, whose 12

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