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

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)
Costs, contributions and actuarial liabilities, when applicable, are determined annually, with a basis on an appraisal
carried out by independent actuaries, the last of which was executed for the base date of December 31, 2009.
Actuarial gains and losses are recognized in the amount that exceeds the limit of 10% in relation to the total assets or
liabilities of the plan, whichever is higher (corridor criterion).
o) Reserve for reversal and amortization
Refers to resourced derived from the Reserve for reversal and amortization, set up until December 31, 1971 under the
terms of the regulation of SPEE (Federal Decree 41,019/57), applied by the subsidiary Bandeirante in the expansion of
the Electricity Public Utility Service, and interest of 5% per annum is charged on the Fund for reversal. Its potential
settlement will occur in accordance with determinations of the Granting Power.
p) Treasury stock (Note 25)
As determined by CVM Instructions 10/80 and 358/02, treasury stocks are recorded at average cost of purchase.
q) Earnings per share
The earnings per share are calculated by the division of the net income for the year by the number of outstanding shares
of the capital stock.
r) Income determination
Income and expenses are recognized on the accrual basis.
Revenue is recognized in the statement of income when all the inherent risks and benefits are transferred to the buyer.
Revenue from electric energy operations and services rendered is recognized in net income in keeping with its
realization. Revenue is not recognized if there are significant uncertainties as to its realization.
The billing of electric energy to all the consumers and concessionaires is executed monthly, in accordance with the
reading calendar and supply agreements, respectively.
The energy supplied and not billed, corresponding to the period lapsed between the date of the last reading and the
closing of the balance sheet, is estimated and recognized as unbilled revenue.
s) Accounting estimates
The preparation of financial statements in accordance with accounting practices adopted in Brazil, with a basis on the
provisions contained in the Corporation Law, requires that Company Management and its subsidiaries use estimates to
record certain transactions that affect assets, liabilities, income and expenses.
The final results of these transactions and information, at the time of their effective realization in subsequent periods,
may differ from these estimates, due to the lack of precision inherent to the process of their determination. The Company
reviews the estimates and assumptions at least quarterly, except for the Post-employment benefit plans, as mentioned in
note 3.2n.
The main estimates related to the financial statements refer to the recording of impacts resulting from:
• Provision for allowance for doubtful accounts;
• Unbilled supply revenue;
• Transactions carried out in the sphere of the Electric Energy Trading Chamber (“CCEE”);
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