Monetary Correction: a Timeline about the Tool Use, from 1944 to 1995

• Main Authors: Ariovaldo dos Santos, Suzana Lopes Salgado Ribeiro
• Format: Article
• Language: English
• Published: Universidade de São Paulo 2014-12-01
• Series: Revista Contabilidade & Finanças
• Subjects: Inflação; Correção monetária; Indexação; Periodização; História econômica
• Online Access: http://www.scielo.br/scielo.php?script=sci_arttext&pid=S1519-70772014000500334&lng=en&tlng=en

This article works with the history of how the tool inflation adjustment of annual reports was arranged over half a century until its extinction. To do this, we related the social contexts, the legislation, and the academic perception corresponding to its best implementation in the financial system of Brazil. This study introduces a chronology of using this tool since the 1940s, when a sporadic revaluation of assets began, until the 1990s, when the signs of fatigue and the very extinction of inflation adjustment became apparent in Brazil. The importance of this historical contextualization relies on the possibility of understanding the history of inflation adjustment related to recent events in the country's history, marked over these 50 years by troubled times in national politics, permeated with strong instabilities. The Brazilian economy has faced, in its recent history, long periods of high inflation rates. Several measures and plans were needed to reduce inflation rates and seek economic stability. Even so, it was observed that, in the first moments when the country experienced a less severe inflation process, compared to some later ones, there was support from a regulatory legislation and concern to measure and mitigate the impacts of devaluation of the currency's purchasing power on the assets of companies. Thus, we also point out the limits imposed by the prohibition to use this tool to deal with the lack of accuracy of annual reports prepared by companies since 1996.