A Comparative Approach to the Analysis of DOAR and DFC Indicators: a case study based on the accounting statements of Vale Do Rio Doce, Cia

Abstract

The new accounting rules imposed by law 11.638/07 could promote a still greater introduction of Brazil into global capital markets and at the same time make it possible for all Brazilian companies with open capital to prepare their financial statements according to both national norms and also International Financial Reporting Standards (IFRS) - standards currently adopted in the chief security markets and in countries which do not have their own accounting norms. For accounting statements prepared by companies subject to the new law, Statement of Cash Flow (SCF) will substitute the Sources and Application of Funds Statement (SAFS). Thus, the question that guides this research problem is: What relevance of the information of the DOAR and DFC donate to the process of making decision in the company? The objective of this study was to analyze and compare the information generated by these two statements This study was qualitative, in the form of a case study and complemented by a bibliographical review and an analysis of documents related to the problem, theme and associated subjects. Reports of Vale Do Rio Doce, Cia (CRVD) from 2002 to 2007 were analyzed. The results suggest that information generated by SAFS and SCF are not significantly different for the majority of indicators. However, it is believed that indicators calculated from SCF generate more useful information for analyzing company liquidity and, in addition are easier to calculate, interpret and analyze.