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v3.19.1

Intangible Assets | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Intangible Assets | 14. Intangible Assets Balances and changes in intangible assets are as follows:
|  | Weighted average useful life (years) |  |  | Balance on 12/31/2017 |  |  | IFRS 15 adoption and reclassifications (i) |  |  | Fair value CBLSA Retrospective effect (ii) |  |  | Balance on 12/31/2017 – Restated (i) |  |  | Additions |  |  | Amortization |  |  | Transfer (iv) |  |  | Write-offs and disposals |  |  | Effect of foreign currency exchange rate variation |  |  | Opening balance TEAS (iii) |  |  | Balance on 12/31/2018 |
Cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill (a) |  |  | — |  |  |  | 1,578,157 |  |  |  | — |  |  |  | (53,866 | ) |  |  | 1,524,291 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 797 |  |  |  | 1,525,088 |
Software (b) |  |  | 5 |  |  |  | 853,079 |  |  |  | — |  |  |  | — |  |  |  | 853,079 |  |  |  | 223,964 |  |  |  | — |  |  |  | (1,258 | ) |  |  | (15,401 | ) |  |  | 2,053 |  |  |  | 49 |  |  |  | 1,062,486 |
Technology (c) |  |  | 5 |  |  |  | 32,617 |  |  |  | — |  |  |  | — |  |  |  | 32,617 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 32,617 |
Commercial property rights (d) |  |  | 10 |  |  |  | 55,069 |  |  |  | — |  |  |  | — |  |  |  | 55,069 |  |  |  | 11,117 |  |  |  | — |  |  |  | — |  |  |  | (2,154 | ) |  |  | — |  |  |  | — |  |  |  | 64,032 |
Distribution rights |  |  | 8 |  |  |  | 4,273,379 |  |  |  | (4,145,188 | ) |  |  | 14,478 |  |  |  | 142,669 |  |  |  | 690 |  |  |  | — |  |  |  | (350 | ) |  |  | — |  |  |  | (20 | ) |  |  | — |  |  |  | 142,989 |
Brands (e) |  |  | — |  |  |  | 113,543 |  |  |  | — |  |  |  | — |  |  |  | 113,543 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,028 |  |  |  | — |  |  |  | 120,571 |
Trademark rights (e) |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | 114,792 |  |  |  | 114,792 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 114,792 |
Others (f) |  |  | 10 |  |  |  | 40,514 |  |  |  | — |  |  |  | — |  |  |  | 40,514 |  |  |  | 1,822 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 945 |  |  |  | — |  |  |  | 43,281 |
|  |  |  |  |  |  | 6,946,358 |  |  |  | (4,145,188 | ) |  |  | 75,404 |  |  |  | 2,876,574 |  |  |  | 237,593 |  |  |  | — |  |  |  | (1,608 | ) |  |  | (17,555 | ) |  |  | 10,006 |  |  |  | 846 |  |  |  | 3,105,856 |
Accumulated amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Software |  |  |  |  |  |  | (456,799 | ) |  |  | — |  |  |  | — |  |  |  | (456,799 | ) |  |  | — |  |  |  | (79,845 | ) |  |  | 59 |  |  |  | 28 |  |  |  | (832 | ) |  |  | (49 | ) |  |  | (537,438 | )
Technology |  |  |  |  |  |  | (32,541 | ) |  |  | — |  |  |  | — |  |  |  | (32,541 | ) |  |  | — |  |  |  | (72 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (32,613 | )
Commercial property rights |  |  |  |  |  |  | (21,292 | ) |  |  | — |  |  |  | — |  |  |  | (21,292 | ) |  |  | — |  |  |  | (4,679 | ) |  |  | — |  |  |  | 2,040 |  |  |  | — |  |  |  | — |  |  |  | (23,931 | )
Distribution rights |  |  |  |  |  |  | (2,677,057 | ) |  |  | 2,580,353 |  |  |  | — |  |  |  | (96,704 | ) |  |  | — |  |  |  | (10,018 | ) |  |  | 125 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (106,597 | )
Trademark rights |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,182 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,182 | )
Others |  |  |  |  |  |  | (31,196 | ) |  |  | — |  |  |  | — |  |  |  | (31,196 | ) |  |  | — |  |  |  | (1,538 | ) |  |  | — |  |  |  | — |  |  |  | (6 | ) |  |  | — |  |  |  | (32,740 | )
|  |  |  |  |  |  | (3,218,885 | ) |  |  | 2,580,353 |  |  |  | — |  |  |  | (638,532 | ) |  |  | — |  |  |  | (99,334 | ) |  |  | 184 |  |  |  | 2,068 |  |  |  | (838 | ) |  |  | (49 | ) |  |  | (736,501 | )
Net amount |  |  |  |  |  |  | 3,727,473 |  |  |  | (1,564,835 | ) |  |  | 75,404 |  |  |  | 2,238,042 |  |  |  | 237,593 |  |  |  | (99,334 | ) |  |  | (1,424 | ) |  |  | (15,487 | ) |  |  | 9,168 |  |  |  | 797 |  |  |  | 2,369,355 |
|  | Weighted average useful life (years) |  |  | Balance on 12/31/2016 |  |  | IFRS 15 adoption and reclassifications (i) |  |  | Balance on 1/1/2017 – Restated (i) |  |  | Additions |  |  | Amortization |  |  | Transfer (iv) |  |  | Write-offs and disposals |  |  | Effect of foreign currency exchange rate variation |  |  | Fair value CBLSA(ii) |  |  | Balance on 12/31/2017 Restated (i) |
Cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill (a) |  |  | — |  |  |  | 1,454,484 |  |  |  | — |  |  |  | 1,454,484 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 69,807 |  |  |  | 1,524,291 |
Software (b) |  |  | 5 |  |  |  | 641,691 |  |  |  | — |  |  |  | 641,691 |  |  |  | 207,703 |  |  |  | — |  |  |  | 2,447 |  |  |  | (1,193 | ) |  |  | 2,431 |  |  |  | — |  |  |  | 853,079 |
Technology (c) |  |  | 5 |  |  |  | 32,617 |  |  |  | — |  |  |  | 32,617 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 32,617 |
Commercial property rights (d) |  |  | 10 |  |  |  | 43,258 |  |  |  | — |  |  |  | 43,258 |  |  |  | 13,837 |  |  |  | — |  |  |  | (68 | ) |  |  | (1,958 | ) |  |  | — |  |  |  | — |  |  |  | 55,069 |
Distribution rights |  |  | 6 |  |  |  | 3,651,316 |  |  |  | (3,525,777 | ) |  |  | 125,539 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17,130 |  |  |  | 142,669 |
Brands (e) |  |  | — |  |  |  | 112,936 |  |  |  | — |  |  |  | 112,936 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 607 |  |  |  | — |  |  |  | 113,543 |
Trademark rights (e) |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 114,792 |  |  |  | 114,792 |
Others (f) |  |  | 10 |  |  |  | 39,172 |  |  |  | — |  |  |  | 39,172 |  |  |  | 420 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 922 |  |  |  | — |  |  |  | 40,514 |
|  |  |  |  |  |  | 5,975,474 |  |  |  | (3,525,777 | ) |  |  | 2,449,697 |  |  |  | 221,960 |  |  |  | — |  |  |  | 2,379 |  |  |  | (3,151 | ) |  |  | 3,960 |  |  |  | 201,729 |  |  |  | 2,876,574 |
Accumulated amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Software |  |  |  |  |  |  | (396,702 | ) |  |  | — |  |  |  | (396,702 | ) |  |  | — |  |  |  | (59,579 | ) |  |  | (5 | ) |  |  | 1,191 |  |  |  | (1,704 | ) |  |  | — |  |  |  | (456,799 | )
Technology |  |  |  |  |  |  | (32,469 | ) |  |  | — |  |  |  | (32,469 | ) |  |  | — |  |  |  | (72 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (32,541 | )
Commercial property rights |  |  |  |  |  |  | (19,568 | ) |  |  | — |  |  |  | (19,568 | ) |  |  | — |  |  |  | (3,689 | ) |  |  | 8 |  |  |  | 1,957 |  |  |  | — |  |  |  | — |  |  |  | (21,292 | )
Distribution rights |  |  |  |  |  |  | (2,131,826 | ) |  |  | 2,045,814 |  |  |  | (86,012 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10,692 | ) |  |  | (96,704 | )
Others |  |  |  |  |  |  | (23,310 | ) |  |  | — |  |  |  | (23,310 | ) |  |  | — |  |  |  | (7,883 | ) |  |  | — |  |  |  | — |  |  |  | (3 | ) |  |  | — |  |  |  | (31,196 | )
|  |  |  |  |  |  | (2,603,875 | ) |  |  | 2,045,814 |  |  |  | (558,061 | ) |  |  | — |  |  |  | (71,223 | ) |  |  | 3 |  |  |  | 3,148 |  |  |  | (1,707 | ) |  |  | (10,692 | ) |  |  | (638,532 | )
Net amount |  |  |  |  |  |  | 3,371,599 |  |  |  | (1,479,963 | ) |  |  | 1,891,636 |  |  |  | 221,960 |  |  |  | (71,223 | ) |  |  | 2,382 |  |  |  | (3 | ) |  |  | 2,253 |  |  |  | 191,037 |  |  |  | 2,238,042 |
|  | Weighted average useful life (years) |  |  | Balance on 12/31/2015 |  |  | IFRS 15 adoption and reclassifications (i) |  |  | Balance on 1/1/2016 – Restated (i) |  |  | Additions |  |  | Amortization |  |  | Transfer (iv) |  |  | Write-offs and disposals |  |  | Effect of foreign currency exchange rate variation |  |  | Balance on 12/31/2016 Restated (i) |
Cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill (a) |  |  | — |  |  |  | 1,456,179 |  |  |  | — |  |  |  | 1,456,179 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,695 | ) |  |  | — |  |  |  | 1,454,484 |
Software (b) |  |  | 5 |  |  |  | 539,522 |  |  |  | — |  |  |  | 539,522 |  |  |  | 99,734 |  |  |  |  |  |  |  | 7,601 |  |  |  | (7 | ) |  |  | (5,159 | ) |  |  | 641,691 |
Technology (c) |  |  | 5 |  |  |  | 32,617 |  |  |  | — |  |  |  | 32,617 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 32,617 |
Commercial property rights (d) |  |  | 10 |  |  |  | 36,588 |  |  |  | — |  |  |  | 36,588 |  |  |  | 7,303 |  |  |  | — |  |  |  |  |  |  |  | (633 | ) |  |  | — |  |  |  | 43,258 |
Distribution rights |  |  | 5 |  |  |  | 3,278,487 |  |  |  | (2,993,263 | ) |  |  | 285,224 |  |  |  | 11,013 |  |  |  | — |  |  |  | (170,698 | ) |  |  | — |  |  |  | — |  |  |  | 125,539 |
Brands (e) |  |  | — |  |  |  | 120,944 |  |  |  | — |  |  |  | 120,944 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8,008 | ) |  |  | 112,936 |
Others (f) |  |  | 4 |  |  |  | 46,951 |  |  |  | — |  |  |  | 46,951 |  |  |  | 607 |  |  |  | — |  |  |  | (5,960 | ) |  |  | (980 | ) |  |  | (1,446 | ) |  |  | 39,172 |
|  |  |  |  |  |  | 5,511,288 |  |  |  | (2,993,263 | ) |  |  | 2,518,025 |  |  |  | 118,657 |  |  |  | — |  |  |  | (169,057 | ) |  |  | (3,315 | ) |  |  | (14,613 | ) |  |  | 2,449,697 |
Accumulated amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Software |  |  |  |  |  |  | (350,760 | ) |  |  | — |  |  |  | (350,760 | ) |  |  | — |  |  |  | (49,380 | ) |  |  | (2 | ) |  |  | 7 |  |  |  | 3,433 |  |  |  | (396,702 | )
Technology |  |  |  |  |  |  | (31,256 | ) |  |  | — |  |  |  | (31,256 | ) |  |  | — |  |  |  | (1,213 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (32,469 | )
Commercial property rights |  |  |  |  |  |  | (16,979 | ) |  |  | — |  |  |  | (16,979 | ) |  |  | — |  |  |  | (3,148 | ) |  |  | — |  |  |  | 559 |  |  |  | — |  |  |  | (19,568 | )
Distribution rights |  |  |  |  |  |  | (1,802,989 | ) |  |  | 1,561,666 |  |  |  | (241,323 | ) |  |  | — |  |  |  | (9,200 | ) |  |  | 164,511 |  |  |  | — |  |  |  | — |  |  |  | (86,012 | )
Others |  |  |  |  |  |  | (15,369 | ) |  |  | — |  |  |  | (15,369 | ) |  |  | — |  |  |  | (7,835 | ) |  |  | (83 | ) |  |  | — |  |  |  | (23 | ) |  |  | (23,310 | )
|  |  |  |  |  |  | (2,217,353 | ) |  |  | 1,561,666 |  |  |  | (655,687 | ) |  |  | — |  |  |  | (70,776 | ) |  |  | 164,426 |  |  |  | 566 |  |  |  | 3,410 |  |  |  | (558,061 | )
|  |  |  |  |  |  | 3,293,935 |  |  |  | (1,431,597 | ) |  |  | 1,862,338 |  |  |  | 118,657 |  |  |  | (70,776 | ) |  |  | (4,631 | ) |  |  | (2,749 | ) |  |  | (11,203 | ) |  |  | 1,891,636 |
(i) | See Note 2.x.
(ii) | See Note 3.c.
(iii) | See Note 3.d.
(iv) | Refers to amounts transferred to property, plant, and equipment and trade receivables.
The amortization expenses were recognized in the financial statements as shown below:
|  | 12/31/2018 |  |  | 12/31/2017 |  |  | 12/31/2016 |
|  |  |  |  | Restated (i) |  |  | Restated (i) |
Inventories and cost of products and services sold |  |  | 15,044 |  |  |  | 2,165 |  |  |  | 11,437 |
Selling and marketing |  |  | 8,920 |  |  |  | 11,689 |  |  |  | 13,352 |
General and administrative |  |  | 75,370 |  |  |  | 57,369 |  |  |  | 47,358 |
|  |  | 99,334 |  |  |  | 71,223 |  |  |  | 72,147 |
(i) | See Note 2.x.
a. Goodwill The balance of the goodwill is tested annually for impairment and presents the following acquisitions:
|  | Segment |  |  | 12/31/2018 |  |  | 12/31/2017 |
|  |  |  |  |  |  |  | Restated (i) |
Goodwill on the acquisition of: |  |  |  |  |  |  |  |  |  |  |  |
Extrafarma |  |  | Extrafarma |  |  |  | 661,553 |  |  |  | 661,553 |
Ipiranga |  |  | Ipiranga |  |  |  | 276,724 |  |  |  | 276,724 |
União Terminais |  |  | Ultracargo |  |  |  | 211,089 |  |  |  | 211,089 |
Texaco |  |  | Ipiranga |  |  |  | 177,759 |  |  |  | 177,759 |
CBLSA (1) |  |  | Ipiranga |  |  |  | 69,807 |  |  |  | 69,807 |
Oxiteno Uruguay |  |  | Oxiteno |  |  |  | 44,856 |  |  |  | 44,856 |
Temmar |  |  | Ultracargo |  |  |  | 43,781 |  |  |  | 43,781 |
DNP |  |  | Ipiranga |  |  |  | 24,736 |  |  |  | 24,736 |
Repsol |  |  | Ultragaz |  |  |  | 13,403 |  |  |  | 13,403 |
TEAS (2) |  |  | Ultracargo |  |  |  | 797 |  |  |  | — |
Others |  |  | Oxiteno |  |  |  | 583 |  |  |  | 583 |
|  |  |  |  |  |  | 1,525,088 |  |  |  | 1,524,291 |
(1) | See Note 3.c.
(2) | See Note 3.d.
On December 31, 2018, the Company tested the balances of goodwill shown in the table above for impairment. The determination of value in use involves assumptions, judgments, and estimates of cash flows, such as growth rates of revenues, costs and expenses, estimates of investments and working capital, and discount rates. The assumptions about growth projections and future cash flows are based on the Company’s business plan of its operating segments, as well as comparable market data, and represent management’s best estimate of the economic conditions that will exist over the economic life of the various CGUs, to which goodwill is related. The main key-assumptions used by the Company to calculate the value in use are described below: Period of evaluation: the evaluation of the value in use is calculated for a period of five years (except the Extrafarma segment), after which the Company calculate the perpetuity, considering the possibility of carrying the business on indefinitely. For the Extrafarma segment, a period of ten years was used due to a four-year period of maturity of new stores. Discount and real growth rates: on December 31, 2018, the discount and real growth rates used to extrapolate the projections ranged from 8.4% to 13.9% and from 0% to 1% p.a., respectively, depending on the CGU analyzed. Revenue from sales and services, costs and expenses, and gross margin: considers the budget prepared for 2019 and the long-term strategic plan prepared by management and approved by the Board of Directors. The goodwill impairment tests and net assets of the Company and its subsidiaries result in the recognition of impairment in the amount of R$ 5,565 for subsidiary Oxiteno Andina for the year ended December 31, 2018 (see Note 2.s.1.ii). The main reason for the impairment recognized is Venezuela’s political and economic situation. The Company assessed a sensitivity analysis of discount and growth rate of perpetuity, due to their significant impact on cash flows and value in use. An increase of 0.5 percentage points in the discount rate or a decrease of 0.5 percentage points in the growth rate of the perpetuity of the cash flow of each business segment would not result in the recognition of impairment. b. Software Includes user licenses and costs for the implementation of the various systems used by the Company and its subsidiaries, such as: integrated management and control, financial management, foreign trade, industrial automation, operational and storage management, accounting information, and other systems. c. Technology The subsidiaries Oxiteno S.A., Oxiteno Nordeste and Oleoquímica recognize as technology certain rights of use held by them. Such licenses include the production of ethylene oxide, ethylene glycols, ethanolamines, glycol ethers, ethoxylates, solvents, fatty acids from vegetable oils, fatty alcohols, and specialty chemicals, which are products that are supplied to various industries. d. Commercial property rights Include those described below:
| • |  | Subsidiary Tequimar has an agreement with CODEBA – Companhia das Docas do Estado da Bahia, which allows it to explore the area in which the Aratu Terminal is located for 20 years, renewable for a similar period. The price paid by Tequimar was R$ 12,000, which is being amortized from August 2002 to July 2042.
| • |  | Subsidiary Tequimar has a lease contract for an area adjacent to the Port of Santos for 20 years from December 2002, renewable for a similar period, which allows the construction, operation, and use of a terminal for liquid bulk unloading, tank storage, handling, and distribution. The price paid by Tequimar was R$ 4,334, which is being amortized from August 2005 to December 2022.
| • |  | Subsidiary Extrafarma pays key money to obtain certain commercial establishments to open drugstores which is stated at the cost of acquisition, amortized using the straight-line method, considering the lease contract terms. In the case of the closedown of stores, the residual amount is written off.
e. Brands and Trademark rights Brands are represented by the acquisition cost of the ‘am/pm’ brand in Brazil and of the Extrafarma brand, acquired in the business combination, and Chevron and Texaco trademark rights. f. Other intangibles Refers mainly to the loyalty program “Clube Extrafarma”.

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- Definition The entire disclosure for intangible assets. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 38 -IssueDate 2018-01-01 -Section Disclosure -URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=38&date=2018-03-01&anchor=sect_Disclosure&doctype=Standard -URIDate 2018-03-16 + Details
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