Management Report 2020
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SLC Agrícola
Management Report 2020
A deferred income tax and social contribution asset and liability are compen-
sated when there is a legally enforceable right of the Company to compensate
the current asset and liability, and if they correlated to the income tax esti-
mated by the same tax agency over the same taxable entity. A deferred income
tax asset is recognized for tax losses, tax credits and unused deductible tem-
porary differences when it is probable that future taxable profit will be availa-
ble against which it will be used.
Deferred income and social contribution tax assets are reviewed at each re-
porting date and will be reduced to the extent that their realization is no longer
probable.
Sales taxes | Income and assets are recognized, net of sales taxes, except for:
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When sales taxes incurred on the purchase of goods or services are not
recoverable from the tax authorities, in which case the sales tax is recog-
nized as part of the cost of acquisition of the asset or expense item, as
appropriate;
When the amounts receivable and payable are presented together with the
amount of sales taxes;
The amount net of sales tax, recoverable or payable, is included as a com-
ponent of the amounts receivable or payable on the balance sheet.
Sales revenues are subject to the following taxes and contributions at the fol-
lowing basic rates:
ICMS Value-Added Tax on Sales and Services
COFINS Contribution for social security funding
PIS Social Integration Program
Rural Worker Assistance - Funrural
Rates
0% to 18.00%
7.60%
1.65%
2.05%
In the income statement, revenues are shown net of these taxes. The consid-
eration is in taxes payable on liabilities. The amounts of taxes payable are
offset against any tax credits arising from the purchase of inputs and property,
plant and equipment, on farms that allow for credit.
i) Financial instruments
Non-derivative financial assets | The Group recognizes loans and receivables
initially at the date they originated. All other assets are initially recognized on
the date of negotiation when the Group becomes a party to the contractual
provisions of the instrument.
The Group writes-off a financial asset when the contractual rights to the cash
flows from the asset expire, or when the Group transfers the rights to receive
the contractual cash flows from a financial asset in a transaction in which es-
sentially all risks and rewards of ownership of the financial asset are trans-
ferred. Any interest that is created or retained by the Group in financial assets
is recognized as an individual asset or liability.
Financial assets or liabilities are offset and the net amount shown on the bal-
ance sheet when, and only when, the Group has the legal right to offset the
amounts and intends to settle on a net basis or to realize the assets and settle
the liabilities simultaneously.
The Group classifies non-derivative financial assets as amortized cost.
Amortized cost - Financial assets with fixed or calculable payments that are
not quoted on the market. Such assets are initially recognized at fair value
plus any attributable transaction costs. They are measured at amortized cost
using the effective interest method, less any impairment loss. They cover ac-
counts receivable from customers and other receivables.
Cash and cash equivalents - Cash and cash equivalents comprise cash balances
and financial investments with original maturities of three months or less from
the date of contracting. Items classified as cash and cash equivalents are sub-
ject to an insignificant risk of change in value, and are used in the management
of short-term obligations.
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