We draw attention to note 2 of the annual accounts, which describes the basis for the preparation of the annual accounts. The financial statements were prepared in accordance with the financial reporting provisions required by the entity's charter and its appendices.
OPERATIONS
PRESENTATION OF FINANCIAL STATEMENTS
RELATIONSHIP WITH THE INDEPENDENT AUDITORS
DECRIPTION OF SIGNIFICANT ACCOUNTING POLICIES
Income and refunds obtained on the basis of exemptions and tax benefits related to the works were recorded during the construction period and reduced the cost of the works. EFFECTS OF EXCHANGE RATE FLUCTUATIONS ON THE FINANCIAL STATEMENTS Transactions of the Entity, carried out in various currencies, mainly in Reais and.
EFFECTS OF EXCHANGE RATE FLUCTUATIONS ON THE FINANCIAL STATEMENTS Operations of the Entity, carried out in sundry currencies, mainly in Reais and
The payment to employees of respected values such as profit sharing is not taken into account in the realization of profit and is accounted for on a cash basis, due to the uncertainty surrounding these payments and the impossibility of making a reliable estimate of the obligation, according to the provisions of the terms of the profit sharing distribution agreement signed each financial year. For information purposes, the table below shows the main inflation indices for the financial years 2015 and 2014.
TRADE ACCOUNTS RECEIVABLE
This also includes provisions for adjusting the dollar on receivables from the consideration for electricity transfer, royalties and compensation for management and supervisory expenses (Notes to the operating accounts) for the current financial year and part of the previous financial year, which are invoiced in 12 instalments, expiring from March year after generation. The Brazilian Ministry of Mines and Energy is responsible for crediting ITAIPU with two-thirds of the electricity transfer fee payment owed to the Paraguayan Treasury.
STOREROOM
BONDS RECEIVABLE
Agreement 5,808/99 signed between ITAIPU and ANDE is said to establish the conditions for ITAIPU to expand sectors 3 and 4 of the substation on the right bank, covering the implementation design, associated equipment, construction works, electromechanical installation, operation and maintenance of facilities. On August 20, 2010, ITAIPU and ANDE signed Additional Note 2 to the above-mentioned agreement in order to determine the rules for the compensation of ITAIPU by ANDE for payments under the loan that ITAIPU concluded with Caja Paraguaya de Jubilaciones y Pensiones del Personal de la Itaipu Binacional - CAJUBI (Note 15), for the installation of a 500/220 kV autotransformer/regulator (T5/R5) in the RTP on the right bank. On February 17, 2012, ITAIPU and ANDE signed Supplementary Note 6 to determine the rules for ITAIPU's compensation by ANDE for payments under the loan ITAIPU entered into with Caja Paraguaya de Jubilaciones y Pensiones del Personal de la Itaipu Binacional - CAJUBI ( note 15 ) to restore the autotransformer assembly/regulator (T4/R4) in the RTP on the right bank.
JUDICIAL DEPOSITS
These consist mainly of securities maturing in April 2024, which are the subject's right, with an amount equal to the principal of the "par-Bond" bonds. Reimbursement of all payments made by ITAIPU to CAJUBI shall be based on the same credit terms of the contract and, if necessary, offsetting ANDE's rights as provided in point III.5 of Annex "C" to the Treaty of ITAIPU. The receivable balance of the FOCEM - LT 500 kV Agreement (Note 11) relates to value added tax (VAT) on import costs, which are deemed inappropriate by the Mercosur Convergence Fund - FOCEM, the project's financing body, and are reimbursed for ITAIPU from ANDES.
OTHER ACCOUNTS RECEIVABLE
Judicial deposits in Brazil, except Interbank Deposit Certificate (CDB) already corrected according to the rules agreed at the time of acquisition, are updated based on the National Consumer Price Index - INPC, for the tax, civil and commercial purposes, and based on the FGTS -correction factor, for labor purposes. On 24 April 2015, Amendment No. 2 signed to expand the scope of the object defined in the said Agreement and its annex number, with the inclusion of related works. The funds for the joint venture will come from: .. i) Credit operations to be contracted by ITAIPU, in accordance with the rules of the Entity; and .. ii) Resources of ANDEs referring to the restoration of returns from capital, as set out in Appendix “C” in the Treaty.
RESULTS
The results are not used as a calculation basis for the return of equity capital, the distribution of profit or the establishment of reserves, as provided for in note 2, points ii and iii. Until 2023, the year foreseen for the total amortization of the debt and the revision of Appendix "C" of the Treaty, the sum of the values calculated in the title of income (losses) and the total of long-term tangible and intangible assets of the economic entity , minus. the amount of capital, as defined in Appendix "C", amortization of loans and financing is an integral part of the Cost of Electricity Service and amortization of long-term tangible assets and amortization of intangible assets are not calculated by the entity.
PROPERTY, PLANT AND EQUIPMENT
The value shown on tangible fixed assets is the original value, since ITAIPU does not calculate depreciation, because it has income from liabilities and because these expenses are not part of the electricity costs, as defined in Annex "C" of the Contract (notes 4.b and 12 ). In that ITAIPU does not calculate depreciation of tangible fixed assets and has depreciation and financial costs arising from loans and financing obtained for the implementation of the project as a component of electricity costs, it uses projections of the tariff composition (costs per unit of electricity of services), which it is approved annually by the entity's board of directors, as a basis for verifying the need to create a provision for impairment. ITAIPU's 2015 Fiscal Year General Inventory of Movable Assets, based on the Manual of Movable Assets of Entities, identified 1,394 assets that were not found by the relevant departments, these goods are subject to general investigation once the inventory is completed. separated by official departments.
INTANGIBLE ASSETS
In 2015, the bidding process began for the hiring of a consulting firm that will undertake the task of creating the general inventory of fixed assets and the physical reconciliation and accounting of the assets, with the start of the work planned for 2016.
LOANS AND FINANCING
ELETROBRAS and the Brazilian National Treasury - TN, signed on December 29, 1998, contracts 423/TN 424/TN and 425/TN, for the allocation of the credits that the company held with this Entity. 235/05, awarded and transferred to the Asset Management Company - EMGEA, part of the credit rights held against ITAIPU, under contract numbers 424/TN and 425/TN, an amount equal to US$ 2,480.0 million. There are no overdue debt payments, supplementary clauses (bonds) linked to the financial results of the Entity, or those that constitute new obligations that affect the amounts recognized in liabilities.
REMUNERATION AND REIMBURSEMENTS
The resulting adjusted dollar amounts generated during the year in royalties, cost reimbursements and management and control costs, and electricity allocation compensation are paid in 12 installments beginning in March of the following fiscal year. The figures for the dollar correction of the revenues generated by investments during the year corresponding to ELETROBRAS and ANDE are paid in a single installment on the last working day of the month following the month in which the final calculation is made. These values must be offset against the debts held by ELETROBRAS and ANDE together as ITAIPU and can be anticipated if cash and cash equivalents are available.
SUPPLIERS
SALARIES AND SOCIAL CHARGES
LABOR INDEMNITIES
POST-EMPLOYMENT BENEFITS
In the 2009 financial year, an accounting provision was created for the relative total actuarial deficit of the Caja Paraguaya de Jubilaciones y Pensiones del Personal de la Itaipu Binacional - CAJUBI pension plan for that year. For the Fundação ITAIPU BR de Previdência e Assistência Social - FIBRA pension plan, no provisions were made in ITAIPU's financial statements due to the positive actuarial results presented in 2015 and 2014. Actuarial liabilities related to the health care plan are fully recognized in the liability of the sponsor, ITAIPU , and these values are adjusted annually based on actuarial opinions.
PROVISION FOR LAWSUITS
OTHER LIABILITIES
CAPITAL
OPERATING INCOME
OPERATING EXPENSES - REMUNERATION AND REIMBURSEMENTS
OPERATING EXPENSES - GENERAL AND ADMINISTRATIVE EXPENSES
OTHER INCOME (EXPENSES)
FINANCIAL EXPENSES - MONETARY VARIATIONS
INSURANCE
The main tangible fixed assets in operation are insured in accordance with the insurance policy approved by the unit's board of directors in 1992, which aims to ensure the following coverage: .. a) Insurance for all items installed in the hydroelectric plant, with the coverage type ''All Risks'' with an insured amount of US. Group life For the employee: Thirty basic salaries, limited to 15 salaries of the highest level of the ITAIPU salary scale. For the spouse: Coverage of 50%, limited to five salaries of the highest level of the salary scale.
FINANCIAL INSTRUMENTS
For the spouse: Coverage of 50%, limited to five salaries from the highest level of the pay scale. the current currency market. The control policy consists of permanent follow-up of the rates entered into against those prevailing in the market. The accounting balances and the market values of the financial instruments included in the consolidated balance sheet at 31 December 2015 are shown below: i) Cash, bank accounts and financial investments.
RELATED PARTIES
The balance of accounts receivable has its market value close to the book balances due to its short-term nature. To optimize the use of these hospitals according to its regional integration policy, ITAIPU decided to extend hospital services to the local communities. The remuneration, costs and benefits relating to the Management's key personnel are presented as follows.
REGULATORY PROVISIONS
This was initiated in November 1994, through Board of Directors Resolution RCA Number 019/94, Itaiguapy Health Foundation, a private non-profit organization, which is responsible for the management and operation of the Hospital Ministro Costa Cavalcanti - HMCC, in Brazil. Then, in March 1997, through Board of Directors Resolution Number 004/97 RCA, the Tesai Health Foundation was created, a private non-profit organization, which is responsible for the management and operation of the ITAIPU Margem Direita Hospital, in Paraguay. In 2005, in Brazil, through Resolution number 010/05 of the Board of Directors, and in 2008 in Paraguay, through Resolution RCA 035/08 of the Board of Directors, ITAIPU Technology Park Foundations were created in both countries, whose mission is to understand and transform the Iguazu Waters region, coordinating and promoting actions aimed at economic, scientific and technological development with respect for people and emphasis on solutions that are centered on water, energy and tourism.
SUPPLEMENTARY INFORMATION
The Governing Board of ITAIPU determines the cost per unit of electricity service according to the conditions defined in the signed documents. 8 of Annex "C" of the Treaty for the remuneration for the supply of electricity must be multiplied by a factor of 5.10 (full five and one tenth). Financial fees for loans and financing: These represent the amounts of fees paid to companies and financial institutions in Brazil and abroad, incurred up to the balance sheet date.
