ITAÚ UNIBANCO S.A. MANAGEMENT REPORT To our ... - Banco Itaú

Provision for events incurred but not reported (IBNR) – recognized for the estimated amount of
events occurred but not reported;
Provision for financial surplus – recognized by the difference between the contributions adjusted
daily by the Investment Portfolio and the funds guaranteeing them, according to the plan’s
regulation;
II.III- Capitalization:
Mathematical provision for redemptions – represents capitalization certificates received to be
redeemed;
Provision for raffle contingencies – recognized according to the methodology provided for in the
Technical Actuarial Note to cover the Provision for raffles in the event of insufficient funds.
o) Contingent assets and liabilities and legal liabilities – tax and social security - assessed, recognized
and disclosed according to the provisions set forth in CMN Resolution No. 3,823 of December 16, 2009.
I – Contingent assets and liabilities
Refer to potential rights and obligations arising from past events, the occurrence of which is dependent
upon future events.
Contingent assets: not recognized, except upon evidence ensuring a high reliability level of realization,
usually represented by claims awarded a final and unappealable judgment and confirmation of the
recoverability of the claim through receipt of amounts or offset against another liability.
Contingent liabilities: basically arise from administrative proceedings and lawsuits, inherent in the
normal course of business, filed by third parties, former employees and governmental bodies, in
connection with civil, labor, tax and social security lawsuits and other risks. These contingencies are
calculated based on conservative practices, being usually recorded based on the opinion of legal
advisors and considering the probability that financial resources shall be required for settling the
obligation, the amount of which may be estimated with sufficient certainty. Contingencies are classified
either as probable, for which provisions are recognized; possible, which are disclosed but not
recognized; and remote, for which recognition or disclosure are not required. Any contingent amounts
are measured through the use of models and criteria which allow their adequate measurement, in spite
of the uncertainty of their term and amounts.
Escrow deposits are restated in accordance with the current legislation.
Contingencies guaranteed by indemnity clauses in privatization processes and with liquidity are only
recognized upon judicial notification with simultaneous recognition of receivables, without any effect on
results.