Management Report 2020
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Management Report 2020
(b) Additional costs linked to productivity: in addition to the lease price, some
contracts provide for an increase in value, through additional productivity,
resulting from the arithmetic average of the productivity obtained with
the agricultural exploration by the lessee. Contracts with this type of char-
acteristic are measured at the minimum fixed amount, with the additional
linked to productivity being considered as totally variable; and
(c) Other leases of machinery and equipment: contracts have variable value,
based on the use of the underlying assets, in addition to having a term of
less than one year.
Impact on income for the year | The leases are accounted for as financial leases, with
a financial component, which reduces the cost of production, due to the effect of re-
cording the adjustment to present value in the financial result.
r) New or revised standards
Changes in CPC 15 (R1): Definition of business | The amendments to CPC 15 (R1)
clarify that, to be considered a business, an integrated set of activities and assets
must include, at a minimum, an input-input of resources and a substantive pro-
cess that, together, contribute significantly to the capacity to generate output -
output of resources. In addition, he clarified that a business can exist without in-
cluding all the inputs - inputs of resources and processes necessary to create out-
puts - outputs of resources. These changes had no impact on the Group's individ-
ual and consolidated financial statements, but may impact future periods if the
Group enters into any business combinations.
Changes to CPC 38, CPC 40 (R1) and CPC 48: Reference Interest Rate Reform | The
amendments to Pronouncements CPC 38 and CPC 48 provide exemptions that apply
to all protective relationships directly affected by the reference interest rate reform. A
protection relationship is directly affected if the reform raises uncertainties about the
period or the value of cash flows based on the reference interest rate of the hedged
item or hedging instrument. These changes have no impact on the Group's individual
and consolidated financial statements, as it does not have interest rate hedging rela-
tionships.
SLC
Agrícola
Changes to CPC 26 (R1) and CPC 23: Material definition | The amendments provide
a new definition of material that states, "the information is material if its omission,
distortion or obscurity can reasonably influence decisions that primary users of gen-
eral purpose financial statements make based on those financial statements, which
provide financial information on entity-specific report". The amendments clarify that
the materiality will depend on the nature or magnitude of the information, individu-
ally or in combination with other information, in the context of the financial state-
ments. Distorted information is material if it could reasonably be expected to influ-
ence decisions made by primary users. These changes had no impact on the individ-
ual and consolidated financial statements.
Review in CPC 00 (R2): Conceptual Framework for Financial Reporting | The state-
ment reviews some new concepts, provides updated definitions and recognition cri-
teria for assets and liabilities and clarifies some important concepts.
These changes had no impact on the Group's individual and consolidated financial
statements. Changes in CPC 06 (R2): Benefits Related to Covid-19 Granted to Lease-
holders in Lease Contracts.
The amendments provide for concession to tenants in the application of the guide-
lines of CPC 06 (R2) on the modification of the lease, when accounting for the related
benefits as a direct consequence of the Covid-19 pandemic. As a practical expedient,
a tenant may choose not to evaluate if a benefit related to Covid-19 granted by the
lessor is a modification of the lease. The lessee who makes this option must account
for any change in the lease payment resulting from the benefit granted in the lease
contract related to Covid-19 in the same way that it would account for the change
by applying CPC 06 (R2) if the change was not a modification of the contract lease.
These changes had no impact on the individual and consolidated financial state-
ments.
There are no standards and interpretations issued and not yet adopted that, in the
opinion of the Management, may have a significant impact on the result or on the
shareholders' equity disclosed by the Company.
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