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Provisions, contingent assets and contingent liabilities | 12 Months Ended
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Dec. 31, 2022
Provisions Contingent Assets And Contingent Liabilities |
Provisions, contingent assets and contingent liabilities | Note 29 - Provisions, contingent assets and contingent liabilities In the ordinary course of its business, ITAÚ UNIBANCO HOLDING may be a party to legal proceedings labor, civil and tax nature. The contingencies related to these lawsuits are classified as follows: a) Contingent assets There are no contingent assets recorded. b) Provisions and contingencies ITAÚ UNIBANCO HOLDING’s provisions for judicial and administrative challenges are long-term, considering the time required for their questioning, and this prevents the disclosure of a deadline for their conclusion. The legal advisors believe that ITAÚ UNIBANCO HOLDING is not a party to this or any other administrative proceedings or lawsuits, in addition to those highlighted throughout this note, that could significantly affect the results of its operations. Civil lawsuits In general, provisions and contingencies arise from claims related to the revision of contracts and compensation for material and moral damages. The lawsuits are classified as follows: Collective lawsuits: Related to claims of a similar nature and with individual amounts that are not considered significant. Provisions are calculated on a monthly basis and the expected amount of losses is accrued according to statistical references that take into account the nature of the lawsuit and the characteristics of the court (Small Claims Court or Regular Court). Contingencies and provisions are adjusted to reflect the amounts deposited into court as guarantee for their execution when realized. Individual lawsuits: Related to claims with unusual characteristics or involving significant amounts. The probability of loss is ascertained periodically, based on the amount claimed and the special nature of each case. The probability of loss is estimated according to the peculiarities of the lawsuits. ITAÚ UNIBANCO HOLDING, despite having complied with the rules in force at the time, is a defendant in lawsuits filed by individuals referring to payment of inflation adjustments to savings accounts resulting from economic plans implemented in the 1980s and the 1990s, as well as in collective lawsuits filed by: (i) consumer protection associations; and (ii) the Public Attorney’s Office, on behalf of the savings accounts holders. ITAÚ UNIBANCO HOLDING recognizes provisions upon receipt of summons, and when individuals demand the enforcement of a ruling handed down by the courts, using the same criteria as for provisions for individual lawsuits. The Federal Supreme Court (STF) has issued some decisions favorable to savings account holders, but it has not established its understanding with respect to the constitutionality of the economic plans and their applicability to savings accounts. Currently, the appeals involving these matters are suspended, by order of the STF, until it pronounces its final decision. In December 2017, through mediation of the Federal Attorney’s Office (AGU) and supervision of the BACEN, savers (represented by two civil associations, FEBRAPO and IDEC) and FEBRABAN entered into an instrument of agreement aiming at resolving lawsuits related the economic plans, and ITAÚ UNIBANCO HOLDING has already accepted its terms. Said agreement was approved on March 1, 2018, by the Plenary Session of the Federal Supreme Court (STF) and savers could adhere to its terms for a 24-month period. Due to the end of this term, the parties signed an amendment to the instrument of agreement to extend this period in order to contemplate a higher number of holders of savings accounts and, consequently, to increase the end of lawsuits. In May, 2020 the Federal Supreme Court (STF) approved this amendment and granted a 30-month term for new adhesions, and this term may be extended for another 30 months, subject to the reporting of the number of adhesions over the first period. Labor claims Provisions and contingencies arise from lawsuits in which labor rights provided for in labor legislation specific to the related profession are discussed, such as: overtime, salary equalization, reinstatement, transfer allowance, pension plan supplement, among others. These lawsuits are classified as follows: Collective lawsuits: related to claims considered similar and with individual amounts that are not considered significant. The expected amount of loss is determined and accrued on a monthly basis in accordance with a statistical model which calculates the amount of the claims and it is reassessed taking into account court rulings. Provisions for contingencies are adjusted to reflect the amounts deposited into court as security for execution. Individual lawsuits: related to claims with unusual characteristics or involving significant amounts. These are periodically calculated based on the amounts claimed. The probability of loss is estimated in accordance with the actual and legal characteristics of each lawsuit. Other risks These are quantified and accrued on the basis of the amount of rural credit transactions with joint liability and FCVS (salary variations compensation fund) credits assigned to Banco Nacional. I - Civil, labor and other risks provisions
Disclosure of Provision |  |  |  |  |
Below are the changes in civil, labor and other risks provisions: |  |
|  |  | 12/31/2022
|  | Note | Civil | Labor | Other Risks | Total
Opening balance - 01/01 |  | 3,317 | 8,219 | 1,558 | 13,094
(-) Provisions guaranteed by indemnity clause | 2d XIV | (225) | (879) | - | (1,104)
Subtotal |  | 3,092 | 7,340 | 1,558 | 11,990
Adjustment / Interest | 23 | 169 | 491 | - | 660
Changes in the period reflected in income | 23 | 903 | 2,339 | 469 | 3,711
Increase (1) |  | 1,403 | 2,663 | 469 | 4,535
Reversal |  | (500) | (324) | - | (824)
Payment |  | (1,140) | (2,936) | (183) | (4,259)
Subtotal |  | 3,024 | 7,234 | 1,844 | 12,102
(+) Provisions guaranteed by indemnity clause | 2d XIV | 207 | 952 | - | 1,159
Closing balance |  | 3,231 | 8,186 | 1,844 | 13,261
Current |  | 1,157 | 2,949 | 605 | 4,711
Non-current |  | 2,074 | 5,237 | 1,239 | 8,550
|  |  | 12/31/2021
|  | Note | Civil | Labor | Other Risks | Total
Opening balance - 01/01 |  | 3,511 | 8,015 | 1,483 | 13,009
(-) Provisions guaranteed by indemnity clause | 2d XIV | (216) | (950) | - | (1,166)
Subtotal |  | 3,295 | 7,065 | 1,483 | 11,843
Adjustment / Interest | 23 | 221 | 155 | - | 376
Changes in the period reflected in income | 23 | 820 | 2,652 | 85 | 3,557
Increase |  | 1,176 | 2,888 | 119 | 4,183
Reversal |  | (356) | (236) | (34) | (626)
Payment |  | (1,244) | (2,532) | (10) | (3,786)
Subtotal |  | 3,092 | 7,340 | 1,558 | 11,990
(+) Provisions guaranteed by indemnity clause | 2d XIV | 225 | 879 | - | 1,104
Closing balance |  | 3,317 | 8,219 | 1,558 | 13,094
Current |  | 1,266 | 2,528 | 429 | 4,223
Non-current |  | 2,051 | 5,691 | 1,129 | 8,871
1) Includes, in the labor provision, the effects of the Voluntary Severance Program.
II - Tax and social security provisions
Schedule of tax and social security provisions |  |  |
Tax and social security provisions correspond to the principal amount of taxes involved in administrative or judicial tax lawsuits, subject to tax assessment notices, plus interest and, when applicable, fines and charges.
The table below shows the change in the provisions: |  |  |
|  | Note | 12/31/2022 | 12/31/2021
Opening balance - 01/01 |  | 6,498 | 6,810
(-) Provisions guaranteed by indemnity clause | 2d XIV | (71) | (71)
Subtotal |  | 6,427 | 6,739
Adjustment / Interest (1) |  | 628 | 202
Changes in the period reflected in income |  | (829) | 8
Increase (1) |  | 156 | 180
Reversal (1) |  | (985) | (172)
Payment |  | (86) | (523)
Subtotal |  | 6,140 | 6,426
(+) Provisions guaranteed by indemnity clause | 2d XIV | 74 | 72
Closing balance |  | 6,214 | 6,498
Current |  | 4 | 10
Non-current |  | 6,210 | 6,488
1) The amounts are included in the headings Tax Expenses, General and Administrative Expenses and Current Income Tax and Social Contribution.
The main discussions related to tax and social security provisions are described below:
• |  | INSS – Non-compensatory Amounts – R$ 1,935: the non-levy of social security contribution on amounts paid as profit sharing is defended. The balance of the deposits in guarantee is R$ 1,167.
• |  | PIS and COFINS – Calculation Basis – R$ 672: defending the levy of PIS and COFINS on revenue, a tax on revenue from the sales of assets and services. The balance of the deposits in guarantee is R$ 659.
III - Contingencies not provided for in the balance sheet Amounts involved in administrative and judicial arguments with the risk of loss estimated as possible are not provided for and they are basically composed of: Civil lawsuits and labor claims In Civil Lawsuits with possible loss, total estimated risk is R$ 5,087 (R$ 4,903 at 12/31/2021), and in this total there are no amounts arising from interests in Joint Ventures. For Labor Claims with possible loss, estimated risk is R$ 637 (R$ 448 at 12/31/2021). Tax and social security obligations Tax and social security obligations of possible loss totaled R$ 40,958 (R$ 35,855 at 12/31/2021), and the main cases are described below:
• |  | INSS – Non-compensatory Amounts – R$ 8,915: defends the non-levy of this contribution on these amounts, among which are profit sharing and stock options.
• |  | ISS – Banking Activities/Provider Establishment – R$ 6,066: the levy and/or payment place of ISS for certain banking revenues are discussed.
• |  | IRPJ, CSLL, PIS and COFINS – Funding Expenses – R$ 5,338: the deductibility of raising costs (Interbank deposits rates) for funds that were capitalized between group companies.
• |  | IRPJ and CSLL – Goodwill – Deduction – R$ 3,677: the deductibility of goodwill for future expected profitability on the acquisition of investments.
• |  | PIS and COFINS - Reversal of Revenues from Depreciation in Excess – R$ 3,370 : discussing the accounting and tax treatment of PIS and COFINS upon settlement of leasing operations.
• |  | IRPJ, CSLL, PIS and COFINS – Requests for Offsetting Dismissed – R$ 2,508: cases in which the liquidity and the certainty of credits offset are discussed.
• |  | IRPJ and CSLL – Disallowance of Losses – R$ 1,327: discussion on the amount of tax loss (IRPJ) and/or social contribution (CSLL) tax loss carryforwards used by the Federal Revenue Service when drawing up tax assessment notes that are still pending a final decision.
• |  | IRPJ and CSLL - Deductibility of Loss in Loan Operations - R$ 958: assessments drawn up for the requirement of IRPJ and CSLL due to the alleged noncompliance with legal criteria for deducting losses in receipt of loans.
c) Accounts receivable – Reimbursement of provisions The receivables balance arising from reimbursements of contingencies totals R$ 899 (R$ 888 at 12/31/2021), arising basically from the collateral established in Banco Banerj S.A. privatization process occurred in 1997, when the State of Rio de Janeiro created a fund to guarantee the equity recomposition in provisions for civil, labor and tax and social security claims. d) Guarantees of contingencies, provisions and legal obligations
The guarantees related to legal proceedings involving ITAÚ UNIBANCO HOLDING and basically consist of:
Summary of Assets Pledged as Collateral for Lawsuits Involving Contingent Liabilities are Restricted or Deposited |  |  |  |  |  |  |
|  | 12/31/2022 |  | 12/31/2021
| Note | Civil | Labor | Tax | Total |  | Total
Deposits in guarantee | 18a | 1,761 | 2,044 | 9,196 | 13,001 |  | 12,264
Investment fund quotas |  | 416 | 136 | 63 | 615 |  | 690
Surety |  | 64 | 52 | 5,146 | 5,262 |  | 4,115
Insurance bond |  | 1,622 | 1,461 | 16,173 | 19,256 |  | 18,771
Guarantee by government securities |  | - | - | 292 | 292 |  | 242
Total |  | 3,863 | 3,693 | 30,870 | 38,426 |  | 36,082

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