Browse Profiles > Bolivia > International Financial Reporting Standards
  Score Rank
Standards Compliance Index 8.33 out of 100 75
Business Indicator Index 5.24 out of 12 73
Bolivia

International Financial Reporting Standards

Summary
In March 2006, the Inter-American Development Bank (IDB) approved the funding of a project aimed at providing assistance to the adoption of International Financial Reporting Standards (IFRSs) and International Standards on Auditing in Bolivia. Although Bolivia has its national accounting standards, the IDB Donors Memorandum issued in 2006 explains that the Bolivian standards are not consistent with IFRSs. Moreover, the domestic accounting framework is incomplete since Bolivia has 14 accounting standards as compared to more than forty IFRSs. The main objective of the project, as mentioned in the IDB Memorandum, is to ensure that business financial reporting in Bolivia is "technically reliable" and transparent. The 36-month long project is expected to harmonize Bolivian standards with international standards and provide access to the harmonized standards to Bolivian accounting professionals. In addition, a project primarily funded by the Swedish International Development Cooperation Agency was also underway with the objective to develop the Uniform Chart of Accounts (PUCs) and thereby enhance Bolivia's legal, regulatory, and institutional structures by means of standardized PUCs.

    General Overview

    As explained in the 2006 Inter-American Development Bank (IDB) Donors Memorandum report "Bolivia: Convergence with Accounting and Auditing Standards," under Law No. 2495 of August 2003 the authority to issue and enforce compliance with accounting and auditing standards lies with the Superintendency of Companies. However, given the fact that "the Superintendency does not have the technical expertise, experience, or structure to issue accounting and auditing standards because of insufficient resources" (IDB 2006, pp. 3-4), the Association of Auditors of Bolivia (CAUB), through its National Technical Council of Auditing and Accounting, plays the leading role in setting professional standards relating to accounting and auditing. The CAUB is a not-for-profit, autonomous professional association of accounting and auditing professionals and consulting firms legally established under the Supreme Resolution No. 209343 of July 1991. Under its charter and regulations, the CAUB sets accounting and auditing standards. It also oversees the auditing and public accounting profession and ensures compliance with professional ethics. With regard to the code of ethics, a 2007 CAUB self-assessment notes that Bolivia adopted the International Federation of Accountants (IFAC) Code without any modifications. However, this is a 1994 version whereas the latest IFAC Code was issued in 2006. The CAUB is listed as a member on the IFAC website.
    The above-mentioned 2006 IDB report notes that the Bolivian accounting and auditing framework suffers from a number of shortcomings. Firstly, there is a lack of trained and experienced accounting professionals to help develop a conceptual framework for bringing national standards in line with international ones. Each year 2,000 students graduate from Bolivian universities trained mainly in bookkeeping. Educating these students in latest international accounting and auditing practices does not take place since most Bolivian teachers are not up to date with the current developments in international standards. As a result, the Memorandum states, entry-level professionals in most businesses do not apply international standards. Secondly, the Memorandum further points out that Bolivian accounting and auditing standards have been issued and approved without an adequate legally established framework. Also, the accounting framework is incomplete since Bolivia has 14 accounting standards as compared to more that 40 International Financial Reporting Standards (IFRSs). Additionally, the Bolivian standards are not consistent with the international standards. In cases where there are no local accounting requirements for a specific issue, companies are allowed to use international standards.
    Consequently, in March 2006, the IDB approved the funding for a project to aid the adoption of IFRSs and ISAs in Bolivia. The Memorandum states that "the aim of the project is to help ensure that business financial reporting in Bolivia is technically reliable, objective, comparable, uniform, and transparent. The objective is to ensure that professional members of the CAUB apply accounting and auditing standards that are in line with International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA)" (p. 1). Further, the successful implementation of the project would improve financial reporting and information management procedures and contribute to the professionalization of accounting in Bolivia. The 36-month long project is divided into three main components: (1) the alignment of national standards with international standards; (2) dissemination and training on the application of the newly developed standards; and finally (3) a voluntary certification system to improve the quality of CAUB professional services. Upon completion, it is expected that Bolivian accounting and auditing standards will be completely harmonized with international standards. The first component of the project will involve analyzing the existing Bolivian standards and the international accounting and auditing standards. The memorandum notes that "initially, standards that need to be applied immediately will be adapted and, if necessary, handbooks providing an interpretation of the standards and guidance on regulations will be prepared" (p. 5). Later, standards will be devised that are aligned with international standards along with a review of the new international standards issued each year. This will be coordinated by the CAUB Technical Council. Upon completion, it is expected that Bolivian accounting and auditing standards will be harmonized with international standards.


    The Principles

    IFRS 1: First-time Adoption of International Financial Reporting Standards (effective 2006)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IFRS 2: Share-based Payment (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IFRS 3: Business Combinations (effective 2004)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IFRS 4: Insurance Contracts (effective 2006)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IFRS 6: Exploration for and Evaluation of Mineral Resources (effective 2006)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IFRS 7: Financial Instruments: Disclosures (effective 2007)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 1: Presentation of Financial Statements (effective 2007)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 2: Inventories (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 7: Cash Flow Statements (effective 1994)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 10: Events after the Reporting Period (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 11: Construction Contracts (effective 1995)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 12: Income Taxes (effective 2001)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 14: Segment Reporting (effective 1998)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 16: Property, Plant and Equipment (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 17: Leases (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 18: Revenue (effective 1995)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 19: Employee Benefits (effective 2006)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 20: Accounting for Government Grants and Disclosure of Government Assistance (effective 1984)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 21: The Effects of Changes in Foreign Exchange Rates (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 23: Borrowing Costs (effective 1995)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 24: Related Party Disclosures (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 26: Accounting and Reporting by Retirement Benefit Plans (effective 1998)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 27: Consolidated and Separate Financial Statements (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 28: Investments in Associates (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 29: Financial Reporting in Hyperinflationary Economies (effective 1990)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 31: Interests in Joint Ventures (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 32: Financial Instruments: Disclosure and Presentation (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 33: Earnings per Share (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 34: Interim Financial Reporting (effective 1999)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 36: Impairment of Assets (effective 2004)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1999)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 38: Intangible Assets (effective 2004)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 39: Financial Instruments: Recognition and Measurement (effective 2006)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 40: Investment Property (effective 2005)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

    IAS 41: Agriculture (effective 2003)

    There is insufficient information publicly available as to Bolivia's compliance with this principle.

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    Sources of Assessment

    Association of Auditors of Bolivia, "Assessment of the Regulatory and Standard- Setting Framework," Self-assessment prepared as part of the International Federation of Accountants' Member Body Compliance Program, July 2006. Available from International Federation of Accountants website. Accessed on August 25, 2008. (CAUB 2006)

    Association of Auditors of Bolivia, "Response to the IFAC Part 2, SMO Self-Assessment Questionnaire," Self-assessment prepared as a part of the International Federation of Accountants' Member Body Compliance Program, July 2007. Available from International Federation of Accountants website. Accessed on August 25, 2008. (CAUB 2007)

    Inter-American Development Bank website. Accessed on August 25, 2008. (IDB website)

    U.S. Department of Commerce, "Doing Business in Bolivia: A Country Commercial Guide for U.S. Companies," U.S. & Foreign Commercial Service and U.S. Department of State, 2007. Available from U.S. Department of Commerce website. Accessed on August 25, 2008. (U.S. DoC 2007)

    Relevant Organizations

    Association of Accountants of Bolivia - Colegio de Contadores de Bolivia (CCB) (website in Spanish only)

    Association of Auditors of Bolivia - Colegio de Auditores de Bolivia (CAUB) (website in Spanish only)

    Bolivian Stock Exchange - Bolsa Boliviana de Valores (BBV) (website in Spanish only)

    Central Bank of Bolivia - Banco Central de Bolivia (BCB) (website in Spanish only)

    Interamerican Accounting Association - Asociación Interameramericana de Contabilidad (AIC) (website in Spanish only)

    Superintendency of Banks and Financial Institutions - Superintendencia de Bancos y Entidades Financieras (SBEF) (website in Spanish only)

    Superintendency of Companies - Superintendencia de Empresas (SdE) (website in Spanish only)

    Superintendency of Pensions, Securities and Insurance - Superintendencia de Pensiones, Valores y Seguros (SPVS) (website in Spanish only)



    Relevant Legislation/Regulation

    Code of Commerce, Decree Law No. 14379, 1978 - Código de Comercio, Decreto Ley No. 14379, 1978 (in Spanish only)

    Property and Credit Law No. 1864, 1998 - Ley de Propiedad y Crédito Popular No. 1864, 1998 (in Spanish only)

    Securities Market Law No. 1834, 1998 - Ley del Mercado de Valores No. 1834, 1998 (in Spanish only)

    Law on Voluntary Reorganization of Enterprises No. 2495, 2003 - Ley de Reestructuracion Voluntaria de Empresas No. 2495, 2003 (in Spanish only)

    Rules and Regulations of the Bolivian Stock Exchange - Mercado Legal de la Bolsa Boliviana de Valores (in Spanish only)

    Code of Ethics of the Association of Accountants of Bolivia - Codigo de Etica Profesional del Colegio de Contadores de Bolivia (in Spanish only)

    Supreme Resolution creating the CAUB No. 209343, 1991 - Resolucion Suprema que crea el CAUB No. 209343, 1991



    Supplementary Sources

    Center for Latin American Monetary Studies and World Bank, "Payments and Securities Clearance and Settlement Systems in Bolivia," December 2004, First English edition, Mexico City: Center for Latin American Monetary Studies and World Bank, 2006. Available from Western Hemisphere Payments and Securities Settlement Forum website. Accessed on August 22, 2008. (CEMLA & WB 2004)

    Deloitte Touche Tohmatsu IAS Plus website. Accessed on August 25, 2008. (IAS Plus website)

    International Federation of Accountants website. Accessed on August 25, 2008. (IFAC website)

    KPMG and FELABAN, "Accounting Practices adopted by Financial Institutions in Latin America," 2002. Available form KPMG US website. Accessed on August 25, 2008. (KPMG & FELABAN 2002)

    Sotomayor I., and Masci P., "International Accounting Standards or United States Generally Accepted Accounting Principles for Latin America and the Caribbean"? Infrastructure and Financial Markets Review, Vol. 8, No. 2, June 2002. Available from Inter-American Development Bank website. Accessed on August 25, 2008. (Sotomayor & Masci 2002)
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