Management Report 2020
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Management Report 2020
CPC 48 (IFRS 9), requires the Company to perform a risk assessment of ex-
pected credit losses, evaluating the credit with the counterparty and recording
the effects when there are indications of losses. The Company has evaluated
its financial assets and established the values found to be immaterial.
Non-financial assets | The book values of the Group's non-financial assets,
other than biological assets, investment property, inventories and deferred in-
come and social contribution taxes, are reviewed at each reporting date to de-
termine whether there are indications of impairment losses. If such indication
occurs, the asset's recoverable amount is estimated.
g) Government subsidies
Government grants are recognized when it is reasonably certain that the ben-
efit will be received and that all the corresponding conditions will be met. When
the benefit refers to an item of expense, it is recognized as revenue over the
period of the benefit, systematically in relation to the costs whose benefit is
intended to offset.
In line with Article 30 of Law 12.973/14, this subsidy was excluded from the
calculation basis for income tax and social contribution, as it is an investment
subsidy.
The investment subsidy amount cannot be distributed to shareholders as divi-
dends, which is why the annual benefit amount was transferred from the re-
tained earnings item to the tax incentive reserve, in Shareholders' Equity. This
reserve can only be used to be added to the share capital or to absorb losses.
h) Taxes
Income and social contribution taxes | The Income and social contribution
taxes for the current and deferred fiscal year are calculated based on the rates
of 15%, plus an additional 10% on taxable income exceeding R$ 240 per year
for income tax and 9% on taxable income for social contribution on net income,
and take into account the offsetting of tax losses and negative basis of social
contribution, which for the rural activity is up to 100% of the annual actual
profit and in the other activities is limited to 30% of the annual taxable income.
SLC
Agrícola
For companies taxed by the presumed profit, the Income Tax and Social Con-
tribution for the current year, are calculated on a cash basis, based on the
rates of 15%, plus an additional 10% on the basis of a surplus of R$ 240 an-
nually for income tax and 9% on the basis of presumption for social contribu-
tion on net income.
Income and social contribution taxes expenses include current and deferred
taxes. Current and deferred tax are recognized in profit or loss unless they are
related to the business combination, or items directly recognized in equity or
other comprehensive income.
Current tax is the tax payable or receivable expected on the taxable profit or
loss for the year at the tax rates enacted or substantively enacted at the date
of presentation of the financial statements and any adjustment to the taxes
payable in respect of prior years.
Deferred tax is recognized with respect to temporary differences between the
book values of assets and liabilities for accounting purposes and the corre-
sponding amounts used for taxation purposes.
Deferred tax is measured at the rates applicable to temporary differences when
reversed, based on laws that have been enacted or substantively enacted by
the reporting date of the financial statements.
In determining current and deferred income taxes, the Company takes into
consideration the impact of uncertainties related to tax positions taken and
whether additional income and interest tax payments must be made. The Com-
pany believes the provision for income tax in liabilities is adequate for all out-
standing tax periods based on its assessment of several factors, including in-
terpretations of tax laws and past experience. This assessment is based on
estimates and assumptions that may involve a series of judgments about fu-
ture events. New information can be available which would cause the Company
to change its judgment as to the adequacy of the existing provision; such
changes will impact the income tax expense for the year in which they are
made, if applicable.
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