Investor Presentaiton
(b) Derivative financial instruments - Put-option
In 2018, the Company acquired a minority interest of 15% in the combined
long steel business of ArcelorMittal Brasil S.A. (AMB). In compliance with
accounting rules, the investment was recognized as a financial instrument
measured at fair value through profit or loss, in accordance with CPC 48/
IFRS 9 Financial instruments. As a result of the terms established in the
contract, this financial instrument was reclassified to short-term in the last
quarter of 2021. The change in the fair value of this operation in the year
ended December 31, 2021 resulted in a gain of R$ 4,452 (December 31,
2021). December 2020, loss of R$ 403 was recorded under Financial result,
net Note 31. The gain recorded in 2021 is justified by the better results
obtained in the long steel operation of AMB.
6.1.2. Estimated fair value
The main financial assets and liabilities are described below, as well as the
assumptions for their valuation:
Financial assets - considering the nature and terms, the amounts recor-
ded are close to the realizable values.
The Company and its subsidiaries disclose the fair value measurements by
the following hierarchy:
Level 1 - quoted prices (not adjusted) in active markets for identical assets
and liabilities;
Level 2 - information, in addition to quoted prices, included in level 1 that
are adopted by the market for the asset or liability, either directly (as prices)
or indirectly (derived from prices), and;
Level 3 - inserts for assets or liabilities that are not based on data adopted
by the market (that is, unobservable insertions).
As at December 31, 2021, financial assets measured at fair value and fi-
nancial liabilities disclosed at fair value were classified in levels 1 and 2 of
hierarchy, as given below:
Fair value measured
based on
Prices quoted supported by
2021
Valuation
in an active
market
Note
(Level 1)
observable
prices
(Level 2)
Fair value
=
Financial liabilities - are subject to interest at the usual market rates. The
market value was calculated based on the present value of the future cash
disbursement, using interest rates currently available for issuing debts with
similar maturities and terms.
Assets
Cash and cash equivalents
Financial investments
9
10
8,636
844
Derivative financial instruments (i)
Derivative financial instruments -
put option
6.1.1 (a)
5,044
2,288
953
13,680
3,132
953
4,704
4,704
Financial instruments - shares
13
23
2,778
2,801
9,503
15,767
25,270
Electric power future contracts - The fair value of these financial ins-
truments is estimated based, in part, on price quotes published in active
markets, insofar as such observable market data exist, and, in part, by the
use of valuation techniques, which consider: (i) prices established in the pur-
chase and sale operations; (ii) supply risk margin and (iii) projected market
price in the availability period. Whenever the fair value at initial recognition
for these contracts differs from the transaction price, a gain or loss of fair
value is recognized in Other operating income (expenses), net.
Liabilities
137
Borrowing (i)
Derivative financial instruments (i)
To rent
20
6.1.1 (a)
21
16,326
10,156
26,482
1,082
1,082
1,551
1,551
Confirming payables
3,405
3,405
16,326
16,194
32,520View entire presentation