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Property, equipment, intangible assets and lease | 3 Months Ended | 12 Months Ended
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Mar. 31, 2020 | Dec. 31, 2019
Text Block [Abstract] |  |
Property, equipment, intangible assets and lease | 8. Property, equipment, intangible assets and lease a) Changes in the period
|  | Property and equipment |  |  | Intangible assets |
As of January 1, 2019 |  |  | 99,127 |  |  |  | 504,915 |
Additions |  |  | 11,375 |  |  |  | 8,061 |
Write-offs |  |  | (56 | ) |  |  | (56 | )
Depreciation / amortization in the period |  |  | (4,672 | ) |  |  | (7,055 | )
As of March 31, 2019 |  |  | 105,774 |  |  |  | 505,865 |
Cost |  |  | 146,865 |  |  |  | 626,921 |
Accumulated depreciation / amortization |  |  | (41,092 | ) |  |  | (121,056 | )
As of January 1, 2020 |  |  | 142,464 |  |  |  | 553,452 |
Additions |  |  | 20,746 |  |  |  | 19,914 |
Write-offs |  |  | (324 | ) |  |  | — |
Transfers |  |  | (2,083 | ) |  |  | 2,083 |
Depreciation / amortization in the period |  |  | (6,255 | ) |  |  | (15,648 | )
As of March 31, 2020 |  |  | 154,548 |  |  |  | 559,801 |
Cost |  |  | 211,839 |  |  |  | 672,045 |
Accumulated depreciation / amortization |  |  | (57,291 | ) |  |  | (112,244 | )
b) Impairment test for goodwill Given the interdependency of cash flows and the merger of business practices, all Group’s entities are considered a single cash generating units (“CGU”) and, therefore, goodwill impairment test is performed at the single operating level. Therefore, the carrying amount considered for the impairment test represents the Company’s equity. The Group performs its annual impairment test in December and when circumstances indicates that the carrying value may be impaired. The Group’s impairment tests are based on value-in-use calculations. The key assumptions used to determine the recoverable amount for the cash generating unit were disclosed in the annual consolidated financial statements for the year ended December 31, 2019. As of March 31, 2020, there were no indicators of a potential impairment of goodwill. c) Leases Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities and the movements during the period:
|  | Right-of-use assets |  |  | Lease liabilities |
As of January 1, 2019 |  |  | 133,870 |  |  |  | 148,494 |
Depreciation expense |  |  | (3,430 | ) |  |  | — |
Interest expense |  |  | — |  |  |  | 2,328 |
Effects of exchange rate |  |  | (1,281 | ) |  |  | 134 |
Payment of lease liabilities |  |  | — |  |  |  | (7,490 | )
As of March 31, 2019 |  |  | 129,159 |  |  |  | 143,466 |
As of December 31, 2019 |  |  | 227,478 |  |  |  | 255,406 |
Additions (i) |  |  | 19,273 |  |  |  | 19,361 |
Depreciation expense |  |  | (9,623 | ) |  |  | — |
Interest expense |  |  | — |  |  |  | 6,145 |
Revaluation (ii) |  |  | (19,968 | ) |  |  | (19,968 | )
Impairment |  |  | (3,040 | ) |  |  | — |
Effects of exchange rate |  |  | 22,016 |  |  |  | 23,561 |
Payment of lease liabilities |  |  | — |  |  |  | (15,558 | )
As of March 31, 2020 |  |  | 236,136 |  |  |  | 268,947 |
Current |  |  | — |  |  |  | 56,581 |
Non-current |  |  | 236,136 |  |  |  | 212,367 |
(i) | Additions to right-of-use assets in the period include prepayments to lessors and accrued liabilities.
(ii) | Revaluation of discount rate that represent the current market assessment.
The Group recognized rent expense from short-term leases and low-value assets of R$ 1,746 for the period ended December 31, 2019. The total rent expense of R$ 9,225, include other expenses related to leased offices such as condominium. | 13. Property, equipment, intangible assets and leases (a) Property and equipment
|  | Data processing system |  |  | Furniture and equipment |  |  | Security systems |  |  | Facilities |  |  | Fixed assets in progress |  |  | Total |
Balance as of January 1, 2017 |  |  | 9,679 |  |  |  | 8,677 |  |  |  | 459 |  |  |  | 8,789 |  |  |  | 1,061 |  |  |  | 28,665 |
Additions |  |  | 6,308 |  |  |  | 6,309 |  |  |  | 5,650 |  |  |  | 9,915 |  |  |  | 2,187 |  |  |  | 30,369 |
Business combination (Note 5 (ii)) |  |  | 804 |  |  |  | 412 |  |  |  | 34 |  |  |  | 478 |  |  |  |  |  |  |  | 1,728 |
Write-offs |  |  | (149 | ) |  |  | (1,690 | ) |  |  | (9 | ) |  |  | (2,503 | ) |  |  | — |  |  |  | (4,351 | )
Transfers |  |  | 709 |  |  |  | 2,181 |  |  |  | — |  |  |  | 358 |  |  |  | (3,248 | ) |  |  | — |
Depreciations in the year |  |  | (3,608 | ) |  |  | (2,628 | ) |  |  | (1,227 | ) |  |  | (1,875 | ) |  |  | — |  |  |  | (9,338 | )
Balance as of December 31, 2017 |  |  | 13,743 |  |  |  | 13,261 |  |  |  | 4,907 |  |  |  | 15,162 |  |  |  | — |  |  |  | 47,073 |
Cost |  |  | 27,400 |  |  |  | 19,124 |  |  |  | 6,403 |  |  |  | 19,281 |  |  |  | — |  |  |  | 72,208 |
Accumulated depreciation |  |  | (13,657 | ) |  |  | (5,863 | ) |  |  | (1,496 | ) |  |  | (4,119 | ) |  |  | — |  |  |  | (25,135 | )
Balance as of January 1, 2018 |  |  | 13,743 |  |  |  | 13,261 |  |  |  | 4,907 |  |  |  | 15,162 |  |  |  | — |  |  |  | 47,073 |
Additions |  |  | 22,319 |  |  |  | 10,448 |  |  |  | 376 |  |  |  | 9,930 |  |  |  | 40,076 |  |  |  | 83,149 |
Write-offs |  |  | (40 | ) |  |  | (924 | ) |  |  | (30 | ) |  |  | (5,078 | ) |  |  | (553 | ) |  |  | (6,625 | )
Transfers |  |  | 31 |  |  |  | 2,109 |  |  |  | 192 |  |  |  | 37,191 |  |  |  | (39,523 | ) |  |  | — |
Depreciation in the year |  |  | (7,282 | ) |  |  | (3,253 | ) |  |  | (2,892 | ) |  |  | (11,043 | ) |  |  | — |  |  |  | (24,470 | )
Balance as of December 31, 2018 |  |  | 28,771 |  |  |  | 21,641 |  |  |  | 2,553 |  |  |  | 46,162 |  |  |  | — |  |  |  | 99,127 |
Cost |  |  | 48,023 |  |  |  | 29,613 |  |  |  | 6,388 |  |  |  | 47,843 |  |  |  | — |  |  |  | 131,867 |
Accumulated depreciation |  |  | (19,252 | ) |  |  | (7,972 | ) |  |  | (3,835 | ) |  |  | (1,681 | ) |  |  | — |  |  |  | (32,740 | )
Balance as of January 1, 2019 |  |  | 28,771 |  |  |  | 21,641 |  |  |  | 2,553 |  |  |  | 46,162 |  |  |  | — |  |  |  | 99,127 |
Additions |  |  | 15,039 |  |  |  | 9,942 |  |  |  | 664 |  |  |  | 22,315 |  |  |  | 24,539 |  |  |  | 72,499 |
Write-offs |  |  | (304 | ) |  |  | (2,047 | ) |  |  | — |  |  |  | (6,112 | ) |  |  | — |  |  |  | (8,463 | )
Transfers |  |  | — |  |  |  | 2,409 |  |  |  | — |  |  |  | 22,130 |  |  |  | (24,539 | ) |  |  | — |
Depreciation in the year |  |  | (9,059 | ) |  |  | (4,189 | ) |  |  | (1,673 | ) |  |  | (5,778 | ) |  |  | — |  |  |  | (20,699 | )
Balance as of December 31, 2019 |  |  | 34,447 |  |  |  | 27,756 |  |  |  | 1,544 |  |  |  | 78,717 |  |  |  | — |  |  |  | 142,464 |
Cost |  |  | 62,235 |  |  |  | 38,086 |  |  |  | 7,716 |  |  |  | 84,726 |  |  |  | — |  |  |  | 192,763 |
Accumulated depreciation |  |  | (27,788 | ) |  |  | (10,330 | ) |  |  | (6,172 | ) |  |  | (6,009 | ) |  |  | — |  |  |  | (50,299 | )
(b) Intangible assets
|  | Software |  |  | Goodwill |  |  | Costumer list |  |  | Trademarks |  |  | Other intangible assets |  |  | Total |
Balance as of January 1, 2017 |  |  | 16,871 |  |  |  | 90,999 |  |  |  | 9,179 |  |  |  | 1,799 |  |  |  | 4,422 |  |  |  | 123,270 |
Additions |  |  | 12,243 |  |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | 8,351 |  |  |  | 20,627 |
Business combination (Note 5 ii)) |  |  | 4,404 |  |  |  | 281,702 |  |  |  | 50,077 |  |  |  | 19,304 |  |  |  | 2,028 |  |  |  | 357,515 |
Write-offs |  |  | (140 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (140 | )
Transfers |  |  | (799 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 799 |  |  |  | — |
Amortization in the year |  |  | (6,879 | ) |  |  | — |  |  |  | (9,286 | ) |  |  | (898 | ) |  |  | (1,002 | ) |  |  | (18,065 | )
Balance as of December 31, 2017 |  |  | 25,700 |  |  |  | 372,701 |  |  |  | 49,970 |  |  |  | 20,238 |  |  |  | 14,598 |  |  |  | 483,207 |
Cost |  |  | 35,489 |  |  |  | 372,701 |  |  |  | 72,072 |  |  |  | 21,230 |  |  |  | 18,753 |  |  |  | 520,245 |
Accumulated Amortization |  |  | (9,789 | ) |  |  | — |  |  |  | (22,102 | ) |  |  | (992 | ) |  |  | (4,155 | ) |  |  | (37,038 | )
Balance as of January 1, 2018 |  |  | 25,700 |  |  |  | 372,701 |  |  |  | 49,970 |  |  |  | 20,238 |  |  |  | 14,598 |  |  |  | 483,207 |
Additions |  |  | 27,828 |  |  |  | — |  |  |  | — |  |  |  | 1,009 |  |  |  | 24,680 |  |  |  | 53,517 |
Business combination |  |  | — |  |  |  | 9,799 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,799 |
Write-offs |  |  | (15 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13,275 | ) |  |  | (13,290 | )
Amortization in the year |  |  | (14,742 | ) |  |  | — |  |  |  | (8,426 | ) |  |  | (2,024 | ) |  |  | (3,126 | ) |  |  | (28,318 | )
Balance as of December 31, 2018 |  |  | 38,771 |  |  |  | 382,500 |  |  |  | 41,544 |  |  |  | 19,223 |  |  |  | 22,877 |  |  |  | 504,915 |
Cost |  |  | 56,127 |  |  |  | 382,500 |  |  |  | 72,072 |  |  |  | 22,239 |  |  |  | 31,308 |  |  |  | 564,246 |
Accumulated amortization |  |  | (17,356 | ) |  |  | — |  |  |  | (30,528 | ) |  |  | (3,016 | ) |  |  | (8,431 | ) |  |  | (59,331 | )
Balance as of January 1, 2019 |  |  | 38,771 |  |  |  | 382,500 |  |  |  | 41,544 |  |  |  | 19,223 |  |  |  | 22,877 |  |  |  | 504,915 |
Additions |  |  | 51,348 |  |  |  | — |  |  |  | 27,000 |  |  |  | — |  |  |  | 10,601 |  |  |  | 88,949 |
Write-offs |  |  | (2,283 | ) |  |  | — |  |  |  | — |  |  |  | (33 | ) |  |  | (466 | ) |  |  | (2,782 | )
Amortization in the year |  |  | (21,526 | ) |  |  | — |  |  |  | (7,945 | ) |  |  | (2,702 | ) |  |  | (5,457 | ) |  |  | (37,630 | )
Balance as of December 31, 2019 |  |  | 66,310 |  |  |  | 382,500 |  |  |  | 60,599 |  |  |  | 16,488 |  |  |  | 27,555 |  |  |  | 553,452 |
Cost |  |  | 104,270 |  |  |  | 382,500 |  |  |  | 105,977 |  |  |  | 22,239 |  |  |  | 39,823 |  |  |  | 654,809 |
Accumulated amortization |  |  | (37,960 | ) |  |  | — |  |  |  | (45,378 | ) |  |  | (5,751 | ) |  |  | (12,268 | ) |  |  | (101,357 | )
(c) Impairment test for goodwill Given the interdependency of cash flows and the merger of business practices, all Group’s entities are considered a single cash generating units (“CGU”) and, therefore, goodwill impairment test is performed at the single operating level. Therefore, the carrying amount considered for the impairment test represents the Company’s equity. The Group tests whether goodwill has suffered any impairment on an annual basis. For the years ended December 31, 2019 and 2018, the recoverable amount of the single CGU was determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a four-year period. Cash flows beyond the four-year period are extrapolated using the estimated growth rates, which are consistent with forecasts included in industry reports specific to the industry in which the Group operates. The Group performed its annual impairment test as of December 31, 2019 and 2018 which did not result in the need to recognize impairment losses on the carrying value of goodwill. Key assumptions used in value-in-use calculations and sensitivity to changes in assumptions are:
Assumption |  | Approach used to determine values
Sales |  | Average annual growth rate over the four-year forecast period; based on past performance and management’s expectations of market development.
Budgeted gross margin |  | Based on past performance and management’s expectations for the future.
Other operating costs |  | Fixed costs, which do not vary significantly with sales volumes or prices. Management forecasts these costs based on the current structure of the business, adjusting for inflationary increases but not reflecting any future restructurings or cost saving measures. The amounts disclosed above are the average operating costs for the four-year forecast period.
Annual capital expenditure |  | Expected cash costs. This is based on the historical experience of management, and the planned refurbishment expenditure. No incremental revenue or cost savings are assumed in the value-in-use model as a result of this expenditure.
Long-term growth rate |  | This is the weighted average growth rate used to extrapolate cash flows beyond the budget period. The rates are consistent with forecasts included in industry reports.
Pre-tax discount rates |  | Reflect specific risks relating to the relevant segments and the countries in which they operate.
Discount rates represent the current market assessment of the risks specific to the Group, taking into consideration the time value of the money and risks of the underlying assets that have not been incorporated in the cash flow estimates, The discount rate calculation is based on the specific circumstances of the Group and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings the Group has. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate. The average pre-tax discount rate applied to cash flow projections is 13,22% and net revenue. d) Leases Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities and the movements during the period:
|  | Right-of-use assets |  |  | Lease liabilities |
As of January 1, 2019 |  |  | 133,870 |  |  |  | 148,494 |
Additions (i) |  |  | 123,529 |  |  |  | 124,283 |
Depreciation expense |  |  | (32,831 | ) |  |  | — |
Interest expense |  |  | — |  |  |  | 17,613 |
Effects of exchange rate |  |  | 2,910 |  |  |  | 2,995 |
Payment of lease liabilities |  |  | — |  |  |  | (37,979 | )
As of December 31, 2019 |  |  | 227,478 |  |  |  | 255,406 |
Current |  |  | — |  |  |  | 52,771 |
Non-current |  |  | 227,478 |  |  |  | 202,635 |
(i) Additions to right-of-use assets in the period include prepayments to lessors and accrued liabilities. The Group recognized rent expense from short-term leases and low-value assets of R$ 1,746 for the period ended December 31, 2019. The total rent expense of R$ 9,225, include other expenses related to leased offices such as condominium.

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