The Accounting Effects of Exchange Rate Variation On Remuneration Of Foreign Investments In Brazil

Abstract

This article aims to elucidate the main points of foreign investments, and the accountingadministration of the Brazilian Corporate Laws. The remittances of profits and the payment ofdividends for foreign investors who invested their financial resources in Brazil have increasedin the last few years, and this is due to the stable economic times that the country isexperiencing. In part, the favorable economic scenario in Brazil is due to the fact of theincreased flow of investments in the country, which it has proved to be properly structured towithstand global financial crises like the one in 2008, which originated in the United States.Revista Científica Hermes 7: 169-176, 2012Considering also that the investor wants to invest in stable economies where there areattractive interest rates, the country became a great place to invest. However, as a basicprinciple for capital market, it must be taken into consideration that exchange rate variationcan be a negative or a positive aspect for it. In the end of this work, among other ideas, weconclude that to maximize the investment value for shareholders, it is necessary an accurateassessment of investment option, and of level of influence of the exchange variation for theinvestment return.