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20. INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2019

Disclosure of detailed information about intangible assets [abstract]

Schedule of composition of intangible assets

The composition of the balance at December 31, 2019 and 2018 is as follow:

		2019												2018
		Historical cost				Accumulated amortization				Residual value				Historical cost				Accumulated amortization				Residual value
In service
Useful life defined
Temporary easements		12				(4	)			8				11				(3	)			8
Onerous concession		20				(13	)			7				19				(12	)			7
Assets of concession (1)		20,039				(8,522	)			11,517				18,674				(7,994	)			10,680
Others		77				(67	)			10				85				(66	)			19
		20,148				(8,606	)			11,542				18,789				(8,075	)			10,714
In progress		82				–				82				63				–				63
Net intangible assets		20,230				(8,606	)			11,624				18,852				(8,075	)			10,777

(1)

The rights of authorization to generate wind energy granted to Parajuru and Volta do Rio, valued at R$ 127, and of the gas distribution concession, granted to Gasmig, valued at R$ 426, are classified in the consolidated balance sheet under Intangibles. These concession assets are amortized by the straight-line method, for the period of the concession.

Schedule of changes in intangible assets

Changes in Intangible assets are as follow:

		2018				Additions				Disposals (2)				Amortization				Transfers (1)				2019
In service
Useful life defined
Temporary easements		9				–				–				(1	)			–				8
Onerous concession		7				–				–				–				–				7
Assets of concession		10,680				891				(41	)			(698	)			685				11,517
Others		18				7				–				(5	)			(10	)			10
		10,714				898				(41	)			(704	)			675				11,542
In progress		63				36				–				–				(17	)			82
Net intangible assets		10,777				934				(41	)			(704	)			658				11,624

(1)

The transfers were made between Intangible assets, concession contract assets and property, plant and equipment as follows: (1) R$685 from concession contract assets to intangible assets; (2) (R$4) from intangible assets to property, plant and equipment and; and (3) (R$23) from intangible assets to concession financial assets.

(2)

This includes the impairment, in the amount of R$ 22 recognized in the Income Statement under “Other expenses”. The test of impairment of intangible assets, relating to the authorization for wind generation granted to Volta do Rio, recognized in 2018 as part of the business combination, arises from non- achievement of the operational performance expected in 2019 for the wind generation assets of the subsidiary. The Value in Use of the assets was calculated based on the projection of future expected cash flows for the operation of the assets of the subsidiary, brought to present value by the weighted average cost of capital defined for the company’s activity, using the Firm Cash Flow (FCFF) methodology.

		2017				Assets arising from business combination				Additions				Disposals				Effects of first-time adoption of IFRS 15				Amortization				Transfer to Held for sale				Transfers				2018
In service
Useful life defined
Temporary easements		10				–				–				–				–				(1	)			–				–				9
Onerous concession		8				–				–				–				–				(1	)			–				–				7
Assets of concession		10,435				162				–				(23	)			–				(668	)			–				774				10,680
Others		17				4				1				–				–				(5	)			(7	)			8				18
		10,470				166				1				(23	)			–				(675	)			(7	)			782				10,714
In progress		686				–				33				(4	)			(621	)			–				–				(31	)			63
Net intangible assets		11,156				166				34				(27	)			(621	)			(675	)			(7	)			751				10,777

		2016				Additions				Disposals				Amortization				Transfers (1)				2017
In service
Useful life defined
Temporary easements		10				–				–				–				–				10
Onerous concession		9				–				–				(1	)			–				8
Assets of concession		9,248				–				(11	)			(638	)			1,836				10,435
Others		18				–				–				(7	)			6				17
		9,285				–				(11	)			(646	)			1,842				10,470
In progress		1,535				1,105				(8	)			–				(1,946	)			686
Net intangible assets		10,820				1,105				(19	)			(646	)			(104	)			11,156

(1)	Balances transferred to financial assets.

Schedule of disclosure of intangible assets principal amortization rates

The main amortization rates, which take into account the useful life that management expects for the asset, and reflect the expected pattern of their consumption, are as follows:

Energy		(%)				Administration		(%)
System cable – below 69 KV		6.67				Software		20.00
System cable – below 69 KV		3.57				Vehicles		14.29
Structure – Posts		3.57				General equipment		6.25
Overhead distribution transformer		4.00				Buildings		3.33
Circuit breaker – up to 69 kV		3.03
Capacitor bank – up to 69 kV		6.67
Voltage regulator – up to 69 kV		4.35


Gas		(%)				Administration		(%)
Tubing		3.33				Software		20.00
Buildings, works and improvements		4.00				Vehicles		20.00
Improvements in leased properties		10.00				Data processing equipment		20.00
Machinery and equipment		5.00 a 20.00				Furniture		10.00

The annual average amortization rate is 4.01%:

Hydroelectric Generation	Wind Power Generation	Gas	Distribution	Administration
19.74	16.90	2.87	3.88	16.03