For the United Stated, the FASB signed a convergence agreement with IASB in 2002, prediciting that, until 2008,
the existing differences should be adjusted between the North American accounting standards and those issued
internationally (LEMES, CARVALHO and OLIVEIRA-LOPES, 2007). Regarding to Brazil, in this same line, the CVM
(2008a, p. 1) determined that the Brazilian publicly traded companies shall, from the fiscal year of 2010, “present their
consolidated financial statements adopting the international accounting standard, in accordance with the pronouncing issued
by IASB”.
In accordance with the IASB standards, the disclosure of financial instruments is regulated by IFRS 7. Its objective
is to require that the entities provide disclosure in their financial reports that allows to their users to evaluate: the meaning of
the financial instruments for the financial position and performance of the company; and ii) the nature and the extension of
the risks resulted from the financial instruments of which the entity is exposed to during the period and date of the report,
and how the entity administrates such risks. These requirements include a minimum and specific disclosure about the credit
risk, liquidity risk and market risks (IASB, 2008b). The standards involve a qualitative and quantitative disclosure that,
together, may provide a general view about the use of the financial instruments by the entity and the exposure to the
consequent risk of this use.
4
Methodological aspects
4.1
Companies selection and reports collection
For the Brazilian capital market, the analyzed reports were the DFP (Demonstrações Financeiras Padronizadas -
Standardized Financial Statements); for the North American capital market, the analyzed reports were the Form_20F, which
are the forms with the accounting reports that the companies shall present, in accordance with the standards disposed by the
FASB. These forms have the deadline until June 30 of the subsequent fiscal year to be sent to SEC (Securities and
Exchange Commission). Due to the fact of this research have started in January, 2008, the recently available Forms_20F for
download were from the fiscal year of 2006. Regarding to the number of accounting years to be analyzed, the last five were
selected (from 2002 to 2006).
Before collecting the accounting reports, the selection of which companies would be part of the data base for the
reports consultancy was necessary. So, a research in the CVM (2008c) register was started, in which was identified the
existence of 102 registrations of Brazilian companies that issued any kind of title in the American market. A filter in these
102 registrations included the three following steps: The exclusion of the financial companies; ii) the exclusion of the
companies which do not negotiate ADR (American Depositary Receipts) in the levels II or III (to be obliged to elaborate the
Form_20F, the companies shall issue ADR in the levels II or III); and iii) the exclusion of the companies that are not
6
Convention