Multinationals in Mozambique have one transition year to adopt international accounting standards

8 February 2010

Maputo, Mozambique, 8 Feb – Large multinational companies operating in Mozambique are already adopting the International Financial Reporting Standards (IFRS), while small and medium sized firms have one year to adopt them, by 2011.

Mozambique’s use of the IFRS, the standard international accounting system, has facilitated the work of many large companies, which were previously forced to use two accounting systems.

In recent notes on the IFRS, Mozambique’s Tax Authority explained that companies were using one statement of results for the country where they operated, for tax effects, and another for the origin country, for consolidation of results.

Simplifying the preparation of companies’ statements of results should also lower costs, besides facilitating comparisons of figures with those of other countries.

The new rule’s application by the Banco de Moçambique led the financial regulator to record “an overall positive impact on own capital valued at 416.5 million meticais [US$14.2 million] compared to the figure presented in the last financial statements,” it indicated.

In compliance with a Council of Ministers decree establishing the Business Accounting System, companies which are public, with a majority state shareholding or listed on Mozambique’s stock exchange have been applying the IFRS since January.

The same decree amends the Corporate Income Tax Code Regulation approved by Parliament in September 2009, the Finance Ministry informed the Mozambican daily Correio da Manhã.

The new rules aim to discipline the activities of companies and credit institutions, “and to align the regulatory framework to best international practices,” indicated the same source. (macauhub)