Desarrolladora Homex, S.A.B. de C.V. and Subsidiaries
Notes to restated consolidated financial statements
for the years ended December 31, 2010 and 2009
(Figures in thousands of Mexican pesos (Ps.), except as otherwise indicated)

27. New accounting principles

During 2009 and 2010, the following new accounting standards were issued under MFRS. All of these standards were adopted by the Company on January 1, 2011, except for the adoption of IFRS, which will be adopted on January 1, 2012. At the date of the financial statements, the Company is evaluating the effect of the observance that these new accounting standards will have on the Company’s consolidated results of operations and financial position; as well as disclosures to the consolidated financial statements.

Effective in 2011:
MFRS B-5, Reporting Financial Information by Segment
This MFRS replaces MFRS B-5, Reporting Financial Information by Segment and establishes the criteria to identify the entity’s segments to disclose as well as the disclosures about those segments. In addition, establishes disclosure requirements of certain of the Entity’s information.

The main changes of this MFRS are as follows: (a) MFRS B-5 includes a managerial approach, while previous MFRS B-5, although it referred to managerial approach, required that the information to disclose were referred to identified segments based on the products or services, geographical areas and customers homogenous groups, also requiring that that information would be segregated in primary and secondary information; (b) new MFRS does not require that business areas are subject to different risks amongst them, in order to qualify as operative segments, while previous MFRS B-5 did; (c) in accordance to new MFRS B-5, business areas in development stage could be catalogued as operative segment, while previous MFRS B-5 required operative segments to generate revenues; (d) MFRS B-5 requires to disclose by segments income interest and interest expense, as well as other comprehensive financial cost items, while previous MFRS B-5 did not require this information; and (e) MFRS B-5 requires to disclose the amounts of liabilities that are included in the usual information of an operative segment that the Company normally uses to make decisions, while previous MFRS B-5 did not require this and let management the option to do so or not.

MFRS C-4, Inventories
In November 2010, the CINIF issued MFRS C-4, which will be effective for fiscal years beginning on or after January 1, 2011 and will replace Mexican accounting Bulletin B-4, Inventories. Any accounting changes resulting from the adoption of this standard related to changes in the formula for assigning inventory costs are to be recognized retrospectively. Changes in valuation methods must be recognized prospectively.

The principal difference between Mexican accounting Bulletin C-4 and MFRS C-4 is that the new standard does not allow using direct costs as the inventory valuation method nor does it allow using the LIFO cost method as the formulas (former method) for the assignment of unit cost to the inventories. MFRS C-4 establishes that inventories must be valued at the lower of either acquisition cost or net realizable value. Such standard also establishes that advances to suppliers for the acquisition of merchandise must be classified as inventories provided the risks and benefits are transferred to the Company. Lastly, MFRS C-4 includes guidelines for the valuation of the inventories of service suppliers.

At the date of issuance of the consolidated financial statements, the Company is in the process of determining the effects of the adoption of this new standard on its financial information.

MFRS C-5, Prepaid Expenses
In November 2010, the CINIF issued MFRS C-5, which will be effective for fiscal years beginning on or after January 1, 2011. MFRS C-5 will replace Mexican accounting Bulletin B-5. Any accounting changes resulting from the adoption of this standard must be recognized retrospectively.

This standard establishes that the main characteristic of a prepaid expense is that it does not result in the transfer to the entity of the benefits and risks inherent to the goods or services to be received. Consequently, prepaid expenses must be recognized in the balance sheet as either current or non-current assets, depending on the item classification in the statement of financial position. Moreover, MFRS C-5 establishes that prepaid expenses made for good or services whose inherent benefits and risks have already been transferred to the entity must be carried to the appropriate caption.

At the date of issuance of the financial statements, the Company is in the process of determining the effects of the adoption of this new standard on its consolidated financial information.

MFRS C-6, Property, Plant and Equipment
MFRS C-6 was issued by the CINIF in December 2010 to replace Mexican accounting Bulletin C-6, Property, Machinery and Equipment, and will be effective for fiscal years beginning on or after January 1, 2011, except for the changes related to the segregation of property, plant and equipment into separate components for those assets with different useful lives. For entities that have not performed this component segregation, the provisions of this new standard will be effective as of January 1, 2012.

Unlike Mexican accounting Bulletin C-6, the scope of this standard includes the accounting treatment for assets to develop or maintain biological assets and assets related to the mining industry. Among other points, it establishes that for acquisitions of free-of-charge assets, the cost of the assets must be null, thus eliminating the option of performing appraisals. In the case of asset exchanges, MFRS C-6 requires entities to determine the commercial substance of the transaction. The depreciation of these assets must be applied against the components of the assets, and the amount to be depreciated is the cost of acquisition less the asset’s residual value. Prepaid expenses for the acquisition of assets are to be recognized as a component of the asset as of the time the benefits and risks inherent to such assets are transferred. In the case of retirement of assets, income is recognized when the requirements for income recognition outlined under the standard have been met. MFRS C-6 also outlines specific disclosures for public entities.

The Company is in the process of evaluating the effects that the adoption of these new standards will have on its consolidated financial statements.

Effective in 2012:
International Financial Reporting Standards (IFRS)
On January 27, 2009 the Mexican Securities Commission (Comisión Nacional Bancaria y de Valores or CNBV) established through the Federation Official Gazette the requirements for listed companies to prepare and present their financial information under IFRS beginning in 2012. Likewise it was specified that early adoption for the years 2008, 2009, 2010 and 2011 is allowed.

The Company will begin to prepare and present its financial information under IFRS effective January 1, 2012.

For additional information on our Financial Statements under US GAAP please refer to the Company’s Annual Report as form 20-F.