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19. LEASING TRANSACTIONS (Tables)
 12 Months Ended
Dec. 31, 2020
Leasing Transactions  
Schedule of credit risk and the market conditions at the lease agreement date

The discount rates were obtained by reference to the Company’s incremental borrowing rate, based on the debts contracted by the Company and through quotations with potential financial institutions and reflect the Company’s credit risk and the market conditions at the lease agreement date, as follows:

 

Marginal rate   Annual rate (%)   Monthly rate (%)
Initial application        
Up to two years     7.96       0.64  
Three to five years     10.64       0.85  
Six to twenty years     13.17       1.04  
                 
Contracts entered – 2019 and 2020                
Up to three years     6.87       0.56  
Three to four years     7.33       0.59  
Four to twenty years     8.08       0.65  
Schedule of right to use

Changes in the right-of-use assets are as follows:

 

    Real estate property   Vehicles   Total
Balances at December 31, 2018   -   -   -
Adoption on January  1, 2019     238       104       342  
Disposals (contracts terminated)                        
Addition     28       4       32  
Disposals (contracts terminated)     (13 )     —         (13 )
Amortization (1)     (37 )     (39 )     (76 )
Remeasurement (2)     (10 )     2       (8 )
Balances at December 31, 2019     206       71       277  
Disposals (contracts terminated)     (9 )     —         (9 )
Amortization (1)     (25 )     (40 )     (65 )
Addition     6       —         6  
Remeasurement (2)     7       (4 )     3  
Balances at December 31, 2020     185       27       212  

 

(1) Amortization of the right-of-use assets is recognized in the Income Statement is net of use of the credits of PIS, Pasep and Cofins taxes on leasing payments of R$2.
(2) The Company has identified events giving rise to modifications of their principal contracts. When occurred, the lease liabilities adjustments are recognized in counterpart of the right-of-use assets.
Schedule of changes in the lease liabilities

The changes in the lease liabilities are as follows:

 

    2019
Balances at December 31, 2018    
January 1, 2019 (1)     342  
Addition     32  
Disposals (contracts terminated)     (13 )
Accrued interest (2)     36  
Payment of principal portion of lease liability     (96 )
Payment of interest     (5 )
Remeasurement (3)     (8 )
Balances at December 31, 2019     288  
Addition     6  
Disposals (contracts terminated)     (10 )
Accrued interest (2)     29  
Payment of principal portion of lease liability     (84 )
Payment of interest     (3 )
Remeasurement (3)     2  
Balances at December 31, 2020     227  
         
Current liabilities     48  
Non-current liabilities     179  

 

(1) Financial expenses recognized in the income statement are net of PIS/Pasep and Cofins taxes credits on lease payments in the amounts of R$2 (R$2 on December 31, 2019).
(2) The Company identified events that give rise to modifications of their principal contracts. When occurred, the lease liabilities adjustments are recognized in counterpart of the right-of-use assets.
Schedule of potential right to recovery

The potential right to recovery of PIS/Pasep and Cofins taxes embedded in the leasing consideration, according to the periods specified for payment, is as follows:

 

Cash flow   Nominal   Adjusted to present value
Consideration for the leasing     644       227  
Potential PIS/Pasep and Cofins (9.25%)     55       18  
Schedule of maturity of its contracts

The cash flows of the contracts containing a lease are, in their majority, indexed to the IPCA inflation index on an annual basis. Below is an analysis of maturity of lease contracts:

 

     
  2021       56  
  2022       27  
  2023       26  
  2024       26  
  2025       26  
  2026 at 2045       483  
  Undiscounted values       644  
  Embedded interest       (417 )
  Lease liabilities       227