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The accounting practices applied follow a rigid pattern of transparency control.
The Treaty of Itaipu, in its annex C, defines the financial bases of the company and the commitments to the economic and financial equilibrium, as foreseen in the strategic plan. Both reflect on the operationalization of corporate actions and in the fulfillment of the sustainability policy.
As a legally international company, with binational management and accounts, the accounting practices applied follow a rigid pattern of transparency control adopted by Brazil and Paraguay.
The accounts are jointly verified by external audits of the two partner countries and the results are communicated annually to the Executive Board of Itaipu and to the Administrator Council. Regarding the receipts, they are due to the provision of electricity services provided to Eletrobras and Ande, which hire the installed power available.
The Treaty contributes to the predictability of revenues and cash flow and reduces the risks posed by hydrological crises that interfere with energy generation. According to annex C, the fare (defined at Itaipu as the unit cost of the electricity service) charged should be sufficient to cover all service costs, operating expenses, investments and financial obligations.
As set out in annex A to the Treaty, the reference currency adopted by Itaipu is the U.S. dollar. Operating revenues and costs are calculated and accounted for in the U.S. currency, but the amounts are received/ executed in Reais or Guaranis, so the exchange variations generate impact on management.
Value Added Statement (in thousands of US $)* [ [201-1]
* the data is binational. The financial statements are available for consultation.
¹the item had the nomenclature altered (it was “post-employment benefits” in the past cycle) to standardize the term adopted in the financial statements of Itaipu. It refers to contracts for recognition of the sponsor’s debts and accounting provisions arising from the actuarial obligations with future benefits to employees, relating to the health care program and the Retirement and Pensions Program of both banks.
²Accounting Provisions arising from labor indemnities by shutdown: Permanent voluntary termination plan, in Brazil, and indemnity for time of service in Paraguay.
³comprises the accounting result obtained in each fiscal year. According to Itaipu’s specificities, it is not used as a basis of calculation for remuneration of equity, participation in results or constitution of accounting reserves. The results are accumulated in the asset, and until 2023, the year provided for the total amortization of the construction debt of the undertaking and revision of Annex C of the Treaty, the sum of the amounts accumulated in the results heading shall be equivalent to the total of the fixed assets and intangible assets of the entity, minus the amount of capital, since, as defined in Annex C, the amortization of loans and financing is an integral part of the cost of the electricity service and the depreciation of the asset and the amortization of the intangible assets are not accounted for by the entity.
