BR GAAP is the body of accounting rules that companies operating in Brazil use to prepare their financial statements. Since 2010, it has been substantially converged with International Financial Reporting Standards, so most treatments will look familiar to anyone who has worked with IFRS. What sets it apart is the layering: a 1976 corporate law provides the foundation, a private standard-setter called the CPC writes the pronouncements, and different government regulators put those pronouncements into force depending on the type of entity. Tax law, sector rules, and a few Brazil-specific requirements then reshape how the standards apply in practice.
Who Writes the Rules and Who Enforces Them
The starting point is Law No. 6,404/76, Brazil’s Corporate Law, which requires corporations and limited liability companies to prepare financial statements.1Comissão de Valores Mobiliários. Regulation of Interest – Section: Laws Law 11,638/2007 amended it to remove tax-driven accounting practices from the financial statements and open the door to full IFRS convergence.
The Comitê de Pronunciamentos Contábeis (CPC), created in 2005, is the private-sector body that develops the accounting standards themselves. It brings together professional accounting bodies, securities market associations, stock exchanges, and academic institutions, and it issues CPC pronouncements (the standards), ICPCs (interpretations), and OCPCs (implementation guidance).
A CPC pronouncement is only binding once the relevant government regulator endorses it. Four agencies matter:
- The CVM (Comissão de Valores Mobiliários), Brazil’s securities regulator, enforces CPC standards for publicly traded companies.2Comissão de Valores Mobiliários. Regulation of Interest
- The CFC (Conselho Federal de Contabilidade), the Federal Accounting Council, governs the profession and enforces CPC standards for non-public entities.
- The BACEN (Banco Central do Brasil) sets accounting requirements for financial institutions, with sector-specific prudential reporting layered on top of IFRS-converged standards.
- The SUSEP (Superintendência de Seguros Privados) oversees accounting for insurers, reinsurers, capitalization companies, and private pension entities.
The same CPC text can therefore carry different legal force depending on the entity in front of you. A listed manufacturer follows the CPC as endorsed by the CVM; a private bank follows it as endorsed and sometimes modified by BACEN. Before analyzing a Brazilian company’s numbers, you need to know which regulator governs it.
Which Framework a Company Uses
BR GAAP scales with company size across three tiers.
Public Companies and Large Private Entities
Publicly traded companies and other CVM-regulated entities apply the full set of CPC pronouncements, which are fully converged with IFRS. Large private companies fall into the same bucket. Brazilian law defines a large private company as one with total assets above R$240 million or annual gross revenue above R$300 million, which pulls many substantial private businesses into the full framework.
Small and Medium-Sized Enterprises
Companies below those thresholds may use CPC PME, Brazil’s adoption of the IFRS for SMEs standard. It omits topics that don’t apply to smaller businesses, narrows accounting policy choices, simplifies recognition and measurement, and reduces disclosures.3IFRS Foundation. The IFRS for SMEs Accounting Standard
Micro-Entities
The smallest businesses use ITG 1000, a further-simplified framework from the CFC. It applies to micro-entities with gross revenue up to R$360,000 and to very small entities with gross revenue between R$360,000 and R$4.8 million.4IFRS Foundation. Accounting for Micro-entities in Brazil
The Financial Statements Required
The 1976 Corporate Law originally required a balance sheet, income statement, statement of retained earnings, and statement of changes in financial position.5Comissão de Valores Mobiliários. Law No 6404 of December 15 1976 After the 2007 amendments and CPC convergence, a public company’s statements now include:
- Balanço Patrimonial (balance sheet)
- Demonstração do Resultado do Exercício, or DRE (income statement)
- Demonstração do Resultado Abrangente, or DRA (statement of comprehensive income)
- Demonstração das Mutações do Patrimônio Líquido, or DMPL (statement of changes in equity)
- Demonstração dos Fluxos de Caixa, or DFC (statement of cash flows)
- Demonstração do Valor Adicionado, or DVA (statement of value added)
The DVA shows the wealth the company generated and how it was distributed among employees, government (taxes), lenders, and shareholders. It is a distinctly Brazilian requirement with no U.S. GAAP equivalent, and it reflects a regulatory philosophy of transparency toward stakeholders beyond investors. Explanatory notes (Notas Explicativas) accompany every statement. Regulators scrutinize them closely, and incomplete notes are a common basis for regulatory findings.
Where BR GAAP Diverges from IFRS and U.S. GAAP
Even with heavy convergence, several areas remain distinct, and these are where cross-border analysts most often stumble.
Tighter Integration with Tax Reporting
Companies on the “lucro real” (actual profit) tax regime must maintain a supplementary record historically called the LALUR (Livro de Apuração do Lucro Real) that reconciles accounting profit under BR GAAP with taxable profit. That record now lives in the ECF (Escrituração Contábil Fiscal), Brazil’s electronic tax bookkeeping system inside the broader SPED digital platform. The ECF tracks permanent and temporary differences between financial and tax results, producing a more integrated financial-and-tax picture than the largely separate systems used in the United States. Law 11,638/2007 formally separated the two, but tax considerations still influence accounting judgments at many Brazilian companies.
No Revaluation of Property, Plant, and Equipment
Under IFRS, companies can choose between a cost model and a revaluation model for PPE. IAS 16 explicitly permits carrying PPE at fair value with revaluation gains recognized in equity.6IFRS Foundation. IAS 16 Property Plant and Equipment U.S. GAAP prohibits revaluation altogether. BR GAAP once permitted it, but Law 11,638/2007 removed the option. Companies with existing revaluation reserves could keep or reverse them; no new revaluations are allowed. On this point, BR GAAP is more restrictive than IFRS. Older balance sheets may still carry revaluation-era amounts for long-lived assets, which affects comparability.
Impairment
BR GAAP follows CPC 01, which is aligned with IAS 36. At the end of each reporting period, companies must check for any indication that an asset has lost value. Annual impairment testing is mandatory regardless of indicators for three categories: intangible assets with indefinite useful lives, intangible assets not yet available for use, and goodwill from business combinations. The carrying amount is compared to the recoverable amount, and any shortfall becomes a loss. Goodwill is not amortized, consistent with IFRS.
Legacy Inflation Adjustments
Brazil once required companies to restate non-monetary assets and equity for changes in purchasing power, a practice known as correção monetária. Law 9,249/95 eliminated the mandatory adjustment effective January 1996, after the economy stabilized under the Plano Real. Modern BR GAAP does not require inflation adjustments, but assets acquired before 1996, especially real estate and land, may still carry balances reflecting cumulative pre-stabilization adjustments.
The Legal Weight of CPC vs. IFRS
Even though the accounting treatment is aligned with IFRS, the legal authority for a Brazilian entity is always the CPC pronouncement, not the IASB standard. If a dispute arises over a company’s accounting, Brazilian courts and regulators look to the CPC text. The distinction is mostly academic, but it becomes real when the CPC adopts a standard with local modifications or on a delayed timeline.
What’s Changing
The CPC continues to translate and adopt new IFRS standards. CPC 51, corresponding to IFRS 18 on presentation and disclosure in financial statements, was issued in mid-2026. IFRS 18 introduces new required subtotals in the income statement, including an operating profit line, which will change how Brazilian companies present results once the standard takes effect.
Sustainability reporting is the other significant shift. Brazilian sustainability standards (NBC TDS) become mandatory in the 2026 calendar year for publicly traded companies, investment funds, and securitizers. The standards converge with IFRS S1 and IFRS S2, issued by the International Sustainability Standards Board. Compliance was voluntary in 2024 and 2025.
Audit Rotation and Filing Deadlines
Public companies must engage independent auditors, and rotation rules are specific. Under CVM Resolution 23, an audit firm may serve the same client for up to five consecutive fiscal years, then must wait at least three years before being rehired. The tenure extends to ten consecutive years if the company maintains a permanent Statutory Audit Committee (CAE) that is fully operational by the end of the third fiscal year of the engagement. Even then, the individual partners, directors, and managers on the engagement must rotate every five years.7Comissão de Valores Mobiliários. CVM Resolution 23
Public companies must make their annual financial information and the standardized financial form (DFP) available within three months of the fiscal year’s end, or on the date the information is published in the press, whichever comes first. Foreign issuers listed on B3 get one additional month. The Reference Form (Formulário de Referência), a comprehensive annual disclosure document similar in scope to the SEC’s 10-K, must be filed through the CVM’s electronic system within five months of the fiscal year’s end. For calendar-year filers, that generally means a DFP due at the end of March and a Reference Form due at the end of May.