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

Exhibit 2

There are two issues with respect to consolidating foreign operations into constant pesos.

1. How should prior amounts be recasted.

2. How should the current year amounts be determined.

Prior Year Amounts

Most companies simply recast the amounts that were reported in prior year financial statements into constant pesos using the inflation rate for the year - the "regular method". However, several companies use a method in which they would "deconsolidate", adjust for the current year-end exchange rate and reconsolidate - the "alternative method". The Following example will illustrate the difference in the methodology.

ASSUMPTIONS:

• Only operation is in the US

• Revenue earned during 1993, 1994, and 1995 was US$ 1,000

• Exchange rates were as follows:

12/31/93 - NP=US$1	1/1/93 - NP3=US$1
12/31/94 - NP5=US$1	1/1/94 - NP3=US$1
12/31/95 - NP7.5=US$1	1/1/95 - NP5=US$1

• Mexican inflation rate was as follows:

1993	10%
1994	10%
1995	50%

• US inflation rate was 5% for 1993 and 1994 and 10% for 1995

• Sales were made on the first day of the year

1993 in 93 pesos (($1,000*1.05)*NP3)	NP3,150
1993 in 94 pesos (NP3,150*1.1)	NP3,465
1993 in 95 pesos (NP3,465*1.5)	NP5,198
1994 in 94 pesos (($1,000*1.05)*NP5)	NP5,250
1994 in 95 pesos (NP5,250*1.5)	NP7,875
1995 in 95 pesos (($1,000*1.1)*NP7.5)	NP8,250

When the 1994 financial statements are presented, the Company would present an increase in sales in 1994 over 1993, in constant 1994 pesos, of 52%. When the 1995 financial statements are presented a comparison of the increase in sales from 1993 to 1994 in 1995 pesos is still 52% - i.e., the updating into a constant currency had no effect on the relationship.

Alternative Method

1993 in 93 pesos (($1,000*1.05)*NP3)	NP3,150
1993 in 94 pesos(($1,000*1.05)*NP5)	NP5,250
1993 in 95 pesos (($1,000*1.1)*NP7.5)	NP8,250
1994 in 94 pesos (($1,000*1.05)*NP5)	NP5,250
1994 in 95 pesos (($1,000*1.1)*NP7.5)	NP8,250
1995 in 95 pesos (($1,000*1.1)*NP7.5)	NP8,250

Analysis

The alternative method eliminates the effect changes in the exchange rates and inflation in the foreign subsidiarys country have on the amounts presented. While this has analytical value, it is generally not allowed in the primary financial statements. In effect, this process restates amounts that were previously presented. Rule 3-20(e) of Regulation S-X requires the financial statements be presented in the same currency for all periods. Price level adjusted financial statements define their reporting currency as pesos of equivalent purchasing power as of a particular date.

Issues

1. Is the alternative method consistent with Rule 3-20(e) of Regulation S-X? If not, the alternative method would not be acceptable in Commission filings - i.e., the amounts could not be adjusted in the reconciliation.

2. If it is determined that the method is consistent with Rule 3-20(e) of Regulation S-X, should there only be one acceptable method?

Current year amounts

It appears the Mexican Accounting Principles Commission has narrowed the alternatives to the following possibilities:

1. Restate for inflation and translate using the year end exchange rates - see above "regular" method.

2. Translate using the exchange rate on the day of the transaction (or weighted average exchange rate) and adjust for inflation in Mexico from that date - IAS method. Using the example above, the amounts would be presented as follows:

1993 in 93 pesos (($1,000*NP3)*1.1)	NP3,300
1993 in 94 pesos (NP3,300*1.1)	NP3,630
1993 in 95 pesos (NP3,630*1.5)	NP5,445
1994 in 94 pesos (($1,000*NP3)*1.1)	NP3,300
1994 in 95 pesos (NP3,300*1.5)	NP4,950
1995 in 95 pesos (($1,000*NP5)*1.5)	NP7,500

The IAS method is conceptually consistent with US GAAP in that regardless of which entity recorded the sale, Mexican parent or US subsidiary, the amount would be the same in constant pesos. For example, if the Mexican entity entered into the exact same transaction as the US entity of January 1, 1995, the product would have been sold for NP5,000, the equivalent of US $1,000 on that date, and both would present sales in constant pesos at December 31, 1995 of NP7,500.

To reduce diverse practice, the Mexican Accounting Principles Commission is considering issuing a circular prior to the completion of a standard on this subject.

HEDGE OF INVESTMENT IN A US SUBSIDIARY

Everyone agreed that if a Mexican company hedges its investment in a foreign subsidiary that the monetary gain included in the income statement would be limited to the amount using the inflation rate in the country of the foreign subsidiary. To illustrate, the monetary gain included in the income statement relating to the hedge of an investment in a US subsidiary would be limited to the US inflation rate.

If alternative 2 above is used to translate foreign subsidiaries, there would not be a monetary gain.

If a company previously recognized a monetary gain relating to debt that is used to hedge an investment in a foreign subsidiary, the change to the method described above would be considered to be a change in accounting principle for which the staff would not object to the conclusion that it is preferable.

The Mexican Accounting Principles Commission is considering issuing a circular on this subject.

EMPLOYEE PROFIT SHARING

The majority believed that the balance sheet methodology should be used. KPMG still believes that the accrual methodology should be used as the employee profit sharing is not a tax. Some large

Mexican companies do not agree with the balance sheet methodology.

ACCOUNTING FOR LONG LIVED ASSETS

There appeared to be a consensus that there was no need to modify the conclusions previously reached regarding the accounting for long lived assets that are to be held for purposes of US GAAP. There does appear to be a lack of consistency in practice with respect to assets that are held for sale and the possibility that the write-downs would be recorded to Retanm as opposed to the income statement.

PENSION PLANS

The Mexican Accounting Principles Commission is in the process of developing a standard that would require the use of real rates and account for the pension liability as a non-monetary item. Discussion took place regarding the difficultly of establishing "real" rates in Mexico. It was agreed that the accounting profession and actuaries will need to work together to address this issue.

It would appear that the change to using real rates would constitute a change in accounting principle. The staff would not object to the conclusion that such a change is preferable.

Prior to the implementation of the standard, it was agreed that if a company uses nominal rates, the portion of the monetary gain that is attributable to the difference between the assumed inflation rates and actual inflation rates would be deferred. Using the example in the memo of July 8, 1996, assume that the 15% discount rate reflects anticipated inflation of 10%. Actual inflation was 52% or 42% greater than expected.

ALTERNATIVE II - 15% discount rate
In nominal pesos

In constant pesos

The Mexican Accounting Principles Commission was considering issuing a circular on this subject.

The applicability of SFAS 87 to severance indemnities should be also discussed.

COMPANY NAME INDEMNITIES	SENIORITY PREMIUMS	SEVERANCE INDEMNITIES
Telefonos de Mexico	SFAS 87	Expense as incurred
Dina Group	Not disclosed	Not disclosed
Vitro SA	SFAS 87	Expense as paid
Bufete Industrial	SFAS 87	Expense as incurred
Grupo Sidek	SFAS 87	Expense as incurred
Grupo Elektra	SFAS 87	Expense as incurred
Desc SA	SFAS 87	Expense as paid
Empresas la Moderna	SFAS 87	Expense as incurred
Grupo Maseca	SFAS 87	Expense as incurred
Grupo Casa Autrey	SFAS 87	Expense as incurred
Transportacion Maritima	SFAS 87	Not disclosed
Group Industrial Durango	SFAS 87	SFAS 87
Grupo Televisa	SFAS 87	Expense as incurred
Grupo de Desarrollo (1)	SFAS 87	SFAS 87
Coca-Cola Femsa	SFAS 87	Expense as paid
Grupo Simec	SFAS 87	Expense as incurred
Empresas ICA	SFAS 87	SFAS 87
Grupo Radio Centro	SFAS 87	Expense as incurred
Grupo Tribasa	SFAS 87	Expense as incurred
International Ceramica	SFAS 87	Expense as incurred
Tubos de Acero	Not material	Expense as paid
Servicios Financieros Quadrum	Not material	Not disclosed
Grupo lusacell	SFAS 87	Expense as paid
Grupo Embotellador	SFAS 87	Expense as paid
Grupo Serfin	SFAS 87	Expense as incurred

1. Indemnities for non voluntary terminations of temporary workers are expensed when paid.

NOTE: Analysis prepared from financial statement notes. In some instances disclosure of policy was not clear and assumption were made.