MD&A and Financial Statements (PDF) - Banco Itaú

k) Goodwill – corresponds to the amount paid in excess for the purchase of investments arising from the
expected future profitability. It does not have a defined useful life and is annually tested for impairment of
assets.
l) Intangible assets – correspond to rights acquired whose subjects are intangible assets intended for
maintenance of the company or which are exercised for such purpose, according to the CMN Resolution No.
3,642, of November 26, 2008. They are composed of rights acquired to credit payrolls and partnership
agreements, amortized over the agreement terms, and software and customer portfolios, amortized over a
term varying from five to ten years
m) Impairment of assets – a loss is recognized when there are clear evidences that assets are stated at a nonrecoverable
value. From 2008, this procedure started to be adopted annually, at the end of each year.
n) Insurance, pension plan and capitalization operations - Insurance premiums, acceptance coinsurance
and selling expenses are accounted for in accordance with the insurance effectiveness term, through the
recognition and reversal of the provision for unearned premiums and deferred selling expenses. Interest
arising from fractioning of insurance premiums is accounted for as incurred. Revenues from social security
contributions, gross revenue from capitalization certificates and respective technical provisions are
recognized upon receipt.
I - Credits from operations and other assets related to insurance and reinsurance operations:
• Insurance premiums receivable - Refer to installments of insurance premiums receivable, current and
past due, in accordance with insurance policies issued;
• Reinsurance recoverable amounts – Refer to claims paid to the insured party pending recovery from
Reinsurer, installments of unsettled claims and incurred but not reported claims - Reinsurance (IBNR),
classified in assets in accordance with the criteria established by CNSP Resolution No. 162, of
December 26, 2006, as amended by CNSP Resolution No. 195, of December 16, 2008, and SUSEP
Circular No. 379, of December 19, 2008.
• Reinsurance unearned premiums – Recognized to determine the portion of reinsurance unearned
premiums, calculated “pro rata die”, and for risks of policies not issued computed based on estimates,
based on the actuarial technical study and in compliance with the criteria established by CNSP
Resolution No. 162, of December 26, 2006, as amended by CNSP Resolution No. 195, of December
16, 2008, and SUSEP Circular No. 379, of December 19, 2008.
II - Technical provisions of insurance, pension plan and capitalization – provisions are recognized
according to the technical notes approved by SUSEP and criteria established by CNSP Resolution No.
162 of December 26, 2006 and the amendments introduced by CNSP Resolution No. 181, of December
19, 2007, and CNSP Resolution No. 195, of December 16, 2008.
II.I - Insurance:
• Provision for unearned premiums – recognized to determine unearned premiums relating to the
risk coverage period, calculated “pro rata die”, and relating to risks not yet issued, calculated
based on estimates, according to an actuarial technical study;
• Provision for premium deficiency – recognized according to the Technical Actuarial Note in case
of insufficient Provision for unearned premiums;
• Provision for unsettled claims - recognized based on claims of loss in an amount sufficient to
cover future commitments, awaiting judicial decision, which amounts are determined by court
appointed experts and legal advisors that make assessments based on the insured amounts and
technical regulations, taking into consideration the likelihood of unfavorable outcome to the
insurance company;
• Provision for claims incurred but not reported (IBNR) – recognized for the estimated amount of
claims occurred for risks assumed in the portfolio but not reported.
II.II - Pension Plan and Individual life with living benefits – correspond to liabilities assumed such as
retirement plans, disability, pension and annuity:
Itaú Unibanco S.A. – - September0, 2010 80