(Reference: AICPA International Practices Task Force - August 15, 1996 meeting)

Exhibit 1

BRAZILIAN REGISTRANT ISSUES:

Background

Brazil is a hyperinflationary country (i.e. cumulative inflationary effects exceed 100% over the most recent three year period). For periods prior to January 1, 1996, Brazilian companies were required to price level adjust their financial statements for local statutory and local GAAP purposes. With effect from January 1, 1996, Brazilian companies are no longer permitted to price level adjust their primary financial statements. Current projections anticipate that Brazil will no longer be hyperinflationary beginning the second half of 1997.

Rule 3-20(c) of Regulation S-X requires foreign private issuers presenting financial statements in a currency of a hyperinflationary country that have not been recast or otherwise supplemented to include information on a historical cost/constant currency or current cost basis prescribed or permitted by appropriate authoritative standards to include supplementary information quantifying the effects of changing prices upon its financial statements. Brazilian registrants have used various inflation indices to price level adjust their financial statements in filings with the SEC.

Issues

1. Should a single inflation index be mandated for use in price level adjusting financial statements for Brazilian companies registering with the SEC? If yes, what index should be used?

Proposal to be Considered:

1. Require a single index to be used on a prospective basis. For example, registrants that had used an index other than the new "mandated" rate would need to begin using the mandated rate on a prospective basis beginning in 1996. Financial statement for 1995 and prior years would be recast to reflect the incremental inflation from January 1,1 996, to December 31, 1996, using the new mandated index. Such registrants would not need to go through the potentially cost prohibitive exercise of recasting prior period financial information as if they had always used the new mandated index to price level adjust their financial statements.

2. The Brazilian Institute of Accountants (IBRACOM is an unofficial body whose views do not represent authoritative standards) recently stated that for companies choosing to price level adjust their financial statement (pro-forma option"), the IGP-M is "the most recommendable index." In addition, a task force of representatives from the Brazilian Big 6 has also recommended the use of the IGP-M or IGP-DI be sued on a prospective basis for price level adjusted financial information of Brazilian companies filing with the SEC. (Both IGPs are calculated using the same scope and techniques, the difference being that the IGP-DI covers the period from the first day of the month through the last day of the month, whereas the IGP-M covers the period from the 21st day of the month through the 20th day of the following month; the later thereby being available earlier for companies wishing to report their financial information on a more timely basis.) It is proposed that the IGP-M or IGP-DI be used on a prospective basis to price level adjust Brazilian financial information in SEC filings.

3. What are the US reporting implications of Brazilian companies not being permitted to price level adjust their Brazilian GAAP primary financial statements effective January 1, 1996?

Reporting Options to be Considered:

1. Continue to price level adjust the primary financial statements included in filings with the SEC. This would result in a departure from Brazilian GAAP resulting in a qualified auditors report. Registrants and their auditors would need to request a waiver from Rule 2-02 of Regulation S-X regarding the qualified audit report in advance of filing with the SEC.

2. Present the local GAAP financial as the primary financial statements and supplementally provide price level adjusted financial information in compliance with Rule 3-20. The required US GAAP information pursuant to Items 17 or 18 of Form 20-F would be reconciled from the supplemental price level adjusted Brazilian GAAP financial information.

The SEC has indicated that the extent of financial information to be price level adjusted will be based on facts and circumstances. At a minimum, the SEC staff would expect that the supplemental price level adjusted financial information include the balance sheet, statements of income, cash flows and shareholders equity as well as certain key footnote information (e.g. segment information would be required if trends on a price level adjusted basis differed from the unadjusted information included in footnotes to the primary financial statements.)