Description:
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SimpleXML store data internally as UTF-8, which is bad if you need iso-8859-1. A good solution is the same used by xml_parser_set_option. ex:
xml_parser_set_option($xp,XML_OPTION_TARGET_ENCODING,'iso-8859-1')

// This is what we have today
$sxml = simplexml_load_string($xmlstr);
//$sxml = simplexml_import_dom($dom);
var_dump($sxml->asXML()); // OK
echo utf8_decode($sxml->menu->historico);

$internalEncoding = 'iso-8859-1';
$sxml = simplexml_load_string($xmlstr, $internalEncoding);
//$sxml = simplexml_import_dom($dom);
var_dump($sxml->asXML()); // OK
echo $sxml->menu->historico; // now, no need of utf8_decode