Energias do Brasil SA and subsidiaries - EDP no Brasil | Investidores

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Pronouncements EDP – ENERGIAS DO BRASIL S.A. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Amounts expressed in thousands of Reais, unless otherwise indicated) CPC 16 - Inventories CPC 17 - Construction contracts CPC 18 - Investments in affiliates CPC 19 - Interest in jointly controlled venture CPC 20 - Costs of loans CPC 22 - Information by segment CPC 25 - Provisions, contingent liabilities and assets CPC 26 - Presentation of the financial statements CPC 27 - Property, plant and equipment CPC 30 - Revenues CPC 32 - Taxes on income CPC 33 - Employee benefits CPC 35 - Separate financial statements CPC 36 - Consolidated financial statements CPC 37 - Initial adoption of international accounting standards CPC 38 - Financial instruments: recognition and measurement CPC 39 - Financial instruments: presentation CPC 40 - Financial instruments: disclosures Interpretations ICPC 01 - Concession contracts ICPC 08 - Accounting of the dividend payment proposal ICPC 09 - Individual, separate and consolidated financial statements and application of the equity method of accounting ICPC 10 - Clarifications on CPC 27 and CPC 28 The Company and its subsidiaries are in a process of evaluating the potential effects relative to the pronouncements, interpretations and guidelines, which might have a relevant impact on the financial statements for the year ended December 31, 2009 to be presented in comparison to the financial statements for the year ending December 31, 2010, and on the following years. Technical interpretation ICPC 01 establishes the criteria of recognition and measurement of the concession contracts, classifying the rights of the companies to which it applies as an intangible asset and/or financial asset recorded at their fair value. Considering the complexity of the alterations required by aforesaid technical interpretation upon the application in the electric energy generation, transmission and distribution businesses, the Company is still evaluating its impacts on its financial statements, at the same time as it keeps track of the discussions and debates in the market, especially at the accounting entities and professional bodies and at the regulatory agencies, which might express an opinion about the aspects for the application of such interpretation. In view of the foregoing, the Company understands that at this time it is not possible to evaluate and reliably quantify the effects of the application of ICPC01 on its financial statements. 3.2 - Summary of significant accounting practices a) Cash and cash equivalents (Note 5) Cash and cash equivalents include cash, bank deposits, other highly liquid short-term financial investments that are promptly convertible into a known sum of cash and are subject to an insignificant risk of change of value. b) Consumers and concessionaires (Note 6) Trade accounts receivable are recorded in the amount invoiced by the subsidiaries, adjusted to present value when applicable, including the respective direct taxes under the responsibility hereof, which include: (i) The amounts billed to final consumers, distributor concessionaires and trading companies, as well as the revenue referring to energy consumed and not billed; (ii) The calculation of the present value is performed for scheduled payments of debts of consumers of the distributor subsidiaries, based on the capital remuneration rates, regulated by ANEEL and applied to the tariffs of electricity 40
EDP – ENERGIAS DO BRASIL S.A. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Amounts expressed in thousands of Reais, unless otherwise indicated) public utility service distributors, through the regulatory WACC in force. The contra entry of the adjustments to present value of accounts receivable is against net income for the year (Note 6.4); (iii) The amounts receivable relating to the energy traded in the Electricity Trading Board - CCEE (Note 6.1); (iv) Allowance for doubtful accounts - The amounts were allocated pursuant to Accounting Instruction 6.3.2, of the Accounting Manual of the Electricity Public Utility Service, as follows: Client clan Overdue more than Residential 90 days Commercial 180 days Other 360 days Furthermore, there was a careful individual analysis of the balance of consumers and concessionaires, and the amount formed is considered sufficient to cover losses considered probable. c) Inventories Materials in stock are recorded at average cost of purchase, which does not surpass the market value, whereas those applicable to operation and maintenance are classified in current assets, and those earmarked for projects and works, are classified in Noncurrent assets, in Fixed assets. d) Account for compensation in variation of Installment “A” costs - CVA (Note 8) These costs are allocated to income as the corresponding revenue is billed to consumers, as determined in Interministerial Rulings 296 and 116, of October 25, 2001 and April 4, 2003, respectively, in Law 10,438, of April 26, 2002, and in the supplementary Resolutions of ANEEL. e) Investments (Note 15) Investments in subsidiaries and associated companies with a percentage of the voting capital above 20% or with significant influence, and in other companies that are part of the same group or that are under common control, are valued by the equity method. Other investments that do not fit in the above category are valued at cost, less provision for devaluation, when applicable. f) Property, plant and equipment (Note 16) Stated at acquisition or construction cost, restated up to December 31, 1995, less accumulated depreciation, calculated using the straight-line method based on the book balances recorded in the respective Reference File Units - UC, as determined by DNAEE Ruling 815, of November 30, 1994, at the annual rates contained in the table attached to ANEEL Resolutions 02, of December 24, 1997 and 44, of March 17, 1999. On account of the provisions of the Accounting Instructions of the Accounting Manual of the Electricity Public Utility Service and in CVM Resolution 193, of July 11, 1996, the financial charges relating to the financing obtained from third parties, effectively invested in construction in progress, are recorded in this subgroup as cost of the respective works. The same procedure was adopted for interest on own capital (when applicable), up to 1997 at Bandeirante and 2001 at Escelsa, which financed the works in progress as provided in the specific legislation of the Electricity Public Utility Service. The main annual depreciation rates practiced by the Company and subsidiaries are as follows: 41
Page 1 and 2: EDP - Energias do Brasil S.A. and s
Page 3 and 4: 3 2009 MANAGEMENT REPORT income amo
Page 5 and 6: REGULATORY ENVIRONMENT TARIFF REVIE
Page 7 and 8: 7 2009 MANAGEMENT REPORT EDP Energi
Page 9 and 10: EXPANSION OF CAPACITY DISTRIBUTION
Page 11 and 12: 11 2009 MANAGEMENT REPORT consumers
Page 13 and 14: 13 2009 MANAGEMENT REPORT In 2009,
Page 15 and 16: 15 2009 MANAGEMENT REPORT In the ca
Page 17 and 18: 17 2009 MANAGEMENT REPORT Bandeiran
Page 19 and 20: OWNERSHIP STRUCTURE 19 2009 MANAGEM
Page 21 and 22: 21 2009 MANAGEMENT REPORT (b) that
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Page 25 and 26: Research & Development (R&D) 25 200
Page 27 and 28: 27 2009 MANAGEMENT REPORT of climat
Page 29 and 30: EDP - ENERGIAS DO BRASIL S.A. BALAN
Page 31 and 32: Operating revenues EDP - ENERGIAS D
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25.3 - Reserves 25.3.1 - Reserve fo
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28 - Operating expenses Manageable
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31 - Insurance coverage EDP - ENERG
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EDP - ENERGIAS DO BRASIL S.A. NOTES
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Financial assets EDP - ENERGIAS DO
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Net revenues 1,136,436 Electricity
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