1. Exemption for recognition of the participation method

The Technical Council of Public Accounting (CTCP by its acronym in Spanish) responded on September 25, 2023, through concept 478 to the consultation on the application in Colombia of the exemption from the equity method for a case under the following assumptions:

- Final parent A has a 100% interest in subsidiary B, which in turn has a 98% interest in entity C.

- Under the terms of IAS 28, paragraph 17, Subsidiary B meets all the elements for applying the equity method exception.

The concept and considerations issued by the CTCP, emphasize the importance of:

- Confirm under the accounting standards that B does not exercise control or influence since owning 98% of C's equity interest; it is inferred that it has voting rights over the relevant activities and that company C is controlled through equity instruments, with associated voting rights.

- Analyze what Law 222 of 1995 and the Commercial Code establish about the presumption of control for companies operating in Colombia.

- Support the analyses for the conclusions drawn with sufficient and competent evidence.

See: https://jadelrio.com/Boletines/Colombia/Flash44.Participaciónpatrimonial.pdf  

2. Considerations for derecognizing fixed assets.

A consultation made to the Technical Council of Public Accounting (CTCP by its acronym in Spanish) regarding the considerations for derecognizing a fixed asset, considering that the asset under analysis still had a book value pending depreciation through concept 483 of September 23 the CTCP indicated the importance of considering:

- The entity's accounting policies must be consistent with applicable IFRS.

- The guidelines established in IAS16 (Plenary IFRS) and section 17 (SME´s IFRS) show that "the derecognition of accounts will depend on factors such as the sale or disposition of the asset, when the risks and benefits associated with the element have been transferred, or when the element has stopped generating future economic benefits," which does not require necessarily that the assets be fully depreciated. 

See: https://jadelrio.com/Boletines/Colombia/Flash44.Bajadeactivos.pdf 

3. Duty to register web pages and internet sites.

The Superintendency of Companies, through official letter No. 220-273335 dated November 7, specified that article 91 of law 633 of 2000 imposes two duties on Companies concerning all Web pages and Internet sites of Colombian origin that operate on the Internet and whose economic activity is commercial, financial, or providing services. These are: a) Registration in the commercial registry and 2) Providing information on monetary transactions to the National Tax and Customs Directorate (as it is known in Colombia - DIAN).

It is clarified that if the web page or internet site is registered in the commercial registry and appears on a certificate of existence, the provisions of the law have been complied with. However, information on economic transactions must also be provided to the National Tax and Customs Directorate (as it is known in Colombia - DIAN).

See: https://jadelrio.com/Boletines/Colombia/Flash44.Iscripcióndepáginaswebysitiosdeinternet.pdf 

The content of this newsletter is merely informative, that´s why it cannot be used under any circumstances as advice on the matter described in it. If you need advice on any of the aspects discussed, our team of professionals will be willing to assist you. contacto@jadelrio.com