XML 49 R29.htm IDEA: XBRL DOCUMENT
v3.21.1

23. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT | 12 Months Ended
--- | ---
Dec. 31, 2020
Financial Instruments And Risks Management |
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT |
23. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
23.1. | Overview
In the ordinary course of business, the Company is exposed to credit, liquidity and market risks, which are actively managed in compliance with the Financial Risk Management Policy (“Risk Policy”) and internal guidelines and strategic documents subject to such policy. The Risk Policy was approved by the Board of Directors on December 17, 2020, is valid for one year and is available at the Company’s website. The Company’s risk management strategy, guided by the Risk Policy, has as main objectives:
| » | To protect operating and financial results of Company, as well its shareholders’ equity from adverse changes in the market prices, specially commodities, foreign exchange and interests;
| » | To protect the Company against counterparty risks in existing financial operations as well as to establish guidelines for sustaining the necessary liquidity to fulfil its financial commitments;
| » | To protect the cash of Company against price volatilities, adverse conditions in the markets in which the Company acts and adverse conditions in its production chain.
The Risk Policy defines the governance of the bodies responsible for the execution, tracking and approval of the risk management strategies, as well as the limits and instruments that can be used.
23.2. | Credit risk management
The Company is exposed to the credit risk related to the financial assets held: trade and non-trade accounts receivable, marketable securities, derivative instruments and cash and equivalents. The Company’s credit risk exposure can be assessed in notes 4, 5, 6 and 23.
23.2.1. | Credit risk in accounts receivable
The credit risk associated with trade accounts receivable is actively managed through specific systems and is supported by internal policies for credit analysis. The significant level of diversification and geographical dispersion of the customer portfolio significantly reduces the risk. However, the Company chooses to complement the risk management by contracting insurance policies for specific markets. The impairment of these financial assets is carried out based on expected credit losses.
23.2.2. | Counterparty credit risk
The credit risk associated with marketable securities, cash and cash equivalents and derivative instruments in general is directed to counterparties with Investment Grade ratings. The maintenance of assets with counterparty risk is constantly assessed according to credit ratings and the Company’s portfolio concentration, aligned with the applicable impairment requisites. On December 31, 2020, the Company held financial investments over R$100,000 at the following financial institutions: Banco Bradesco, Banco BIC, Banco BNP Paribas, Banco do Brasil, Banco BTG Pactual, Banco Itaú, Banco Safra, Banco Santander, Citibank, HSBC, J.P. Morgan Chase Bank, T.Garanti Bankasi A.Ş. and Vakiflar Bankasi. The Company also held derivative contracts with the following financial institutions: Banco Bradesco, Banco Itaú, Banco Santander, Banco Votorantim, Bank of America Merrill Lynch, Banco BNP Paribas, Citibank, Deutsche Bank, ING Bank, J.P. Morgan Chase Bank, Morgan Stanley, Rabobank and XP.
23.3. | Capital management and liquidity risk
The Company is exposed to liquidity risk as far as it needs cash or other financial assets to settle its obligations in the respective terms. The Company’s cash and liquidity strategy takes into consideration historical volatility scenarios of results as well as simulations of sectorial and systemic crisis. It is grounded on allowing resilience in scenarios of capital restriction. The ideal capital structure definition at BRF is essentially associated with (i) strong cash position as a tolerance factor for liquidity shocks, which includes minimum cash analysis; (ii) net indebtedness; and (iii) maximization of the capital opportunity cost. As a guideline, the gross debt must be concentrated at long-term. On December 31, 2020, the long-term consolidated gross debt represented 93.66% (82.50% as of December 31, 2019) of the total gross indebtedness, which has an average term higher than nine years. The Company monitors the gross debt and net debt as set forth below:
| 12.31.20 |  | 12.31.19
| Current |  | Non-current |  | Total |  | Total
Foreign currency loans and borrowings | (575,147) |  | (15,163,987) |  | (15,739,134) |  | (11,006,524)
Local currency loans and borrowings | (484,837) |  | (6,180,455) |  | (6,665,292) |  | (7,613,755)
Derivative financial liabilities | (384,969) |  | (727) |  | (385,696) |  | (153,612)
Gross debt | (1,444,953) |  | (21,345,169) |  | (22,790,122) |  | (18,773,891)
Marketable securities and cash and cash equivalents | 7,890,783 |  | 344,577 |  | 8,235,360 |  | 4,963,319
Derivative financial assets | 377,756 |  | 234 |  | 377,990 |  | 245,315
Restricted cash | 1 |  | 24,357 |  | 24,358 |  | 296,294
Net debt |  |  |  |  | (14,152,414) |  | (13,268,963)
The table below summarizes the significant commitments and contractual obligations that may impact the Company’s liquidity:
| 12.31.20
| Book value |  | Contractual cash flow |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 onwards
Non derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and borrowings | 22,404,426 |  | 34,310,033 |  | 1,731,718 |  | 3,405,806 |  | 3,491,994 |  | 2,668,153 |  | 1,418,320 |  | 21,594,042
Trade accounts payable | 9,009,987 |  | 9,098,376 |  | 9,084,595 |  | 5,499 |  | 5,433 |  | 2,849 |  | - |  | -
Supply chain finance | 1,452,637 |  | 1,474,227 |  | 1,474,227 |  | - |  | - |  | - |  | - |  | -
Lease liabilities | 2,536,681 |  | 3,277,861 |  | 409,409 |  | 542,947 |  | 448,295 |  | 377,710 |  | 283,917 |  | 1,215,583
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency derivatives | 81,650 |  | 81,650 |  | 81,650 |  | - |  | - |  | - |  | - |  | -
Commodities derivatives | 269,361 |  | 269,361 |  | 268,634 |  | 727 |  | - |  | - |  | - |  | -
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interestrate derivatives | 14,649 |  | 14,649 |  | 14,649 |  | - |  | - |  | - |  | - |  | -
Currency derivatives | 20,036 |  | 20,036 |  | 20,036 |  | - |  | - |  | - |  | - |  | -
The Company does not expect that the cash outflows to fulfill the obligations presented above will be significantly influenced by factors unrelated to its best interests, or substantially modified outside the normal course of business.
23.4. | Market risk management
23.4.1. | Interest rate risk
The interest rate risk may cause economic losses to the Company resulting from volatility in interest rates that affect its assets and liabilities. The Company’s Risk Policy does not restrict exposure to different interest rates, neither establishes limits for fixed or floating rates. However, the Company continually monitors the market interest rates in order to evaluate any need to enter into hedging transactions to protect from the fluctuation of such rates and manage the mismatch between its financial investments and debts. The indebtedness is essentially linked to the fixed coupon (R$, USD, EUR e TRY), Interbank Deposit Certificate (“CDI”), Broad Consumer Price Index (“IPCA”) and London Interbank Offered Rate (“LIBOR”). In situations of adverse market changes that result in an increase in these rates, the cost of floating-rate debt rises and on the other hand, the cost of fixed-rate debt decreases in relative terms. Regarding the marketable securities, the Company holds, mainly, instruments indexed by the CDI for investments in Brazil and fixed coupon in USD for investments in the foreign market. The Company’s exposure to interest rates can be assessed in notes 4, 5 and 14. The derivative financial instruments used to hedge the exposure to interest rates as of December 31, 2020 are presented in the table below:
12.31.20
Derivative instruments not designated |  | Maturity |  |  |  | Asset |  | Liability |  | Notional |  | Fair value (R$)
Interest rate swap |  | 2nd Qtr. 2021 |  |  |  | USD + 2.80% p.a. |  | CDI + 2.27% p.a. |  | 49,900 | USD |  | (14,649)
|  |  |  |  |  |  |  |  |  |  |  |  | (14,649)
23.4.2. | Foreign exchange risk
This risk is the one that may cause unexpected losses to the Company resulting from volatility of the FX rates, reducing its assets and revenues or increasing its liabilities and costs. The Company’s exposure is managed in three dimensions: statement of financial position exposure, operating income exposure and investments exposure.
| i. | Statement of financial position exposure
The Risk Policy regarding statement of financial position exposure has the objective to balance assets and liabilities denominated in foreign currencies, hedging the Company’s statement of financial position by using natural hedges, over-the-counter derivatives and exchange traded futures. Assets and liabilities denominated in foreign currency for which the exchange variations are recognized in the Financial Results are as follows, summarized in Brazilian Reais:
|  | 12.31.20 |  | 12.31.19 (1)
Cash and cash equivalents |  | 2,855,979 |  | 2,591,746
Trade accounts receivable |  | 5,765,753 |  | 4,892,708
Trade accounts payable |  | (859,790) |  | (601,007)
Loans and borrowings |  | (14,947,793) |  | (8,854,826)
Other assets and liabilities, net |  | 225,694 |  | (162,341)
Exposure of assets and liabilities in foreign currencies |  | (6,960,157) |  | (2,133,720)
Derivative financial instruments (hedge) |  | 6,849,947 |  | 1,734,517
Exposure in result, net |  | (110,210) |  | (399,203)
| (1) | In the consolidated financial statements for the year of 2019, the Company presented the exposure arising from monetary assets and liabilities in foreign entities, for which Real is the functional currency, in a single line item “Investments”. For better management of the foreign exchange exposure, in 2020 the Company begun to break down such exposure, by classifying each asset or liability by its nature. Therefore, the comparative period has been restated for comparability.
The net P&L exposure is mainly composed of the following currencies:
Net P&L Exposure |  | 12.31.20 |  | 12.31.19
Argentinian Peso (ARS) |  | (5,310) |  | (13,236)
Euros (EUR) |  | 104,539 |  | 23,624
Pound Sterling (GBP) |  | 9,394 |  | 6,949
Yen (JPY) |  | 29,976 |  | (17,285)
Rubles (RUB) |  | (1,261) |  | 2,780
Turkish Liras (TRY) |  | 178,906 |  | (418,576)
U.S. Dollars (USD) |  | (426,454) |  | 16,541
Total |  | (110,210) |  | (399,203)
The Company has exposure to other different currencies, although they have been grouped in the currencies above due to its high correlation or for not being individually significant. The derivative financial instruments hired to hedge the foreign currency statement of financial position exposure on December 31, 2020 are not designated as hedge accounting and are set forth below:
12.31.20
Derivative instruments not designated |  | Asset |  | Liability |  | Maturity |  | Notional |  | Exercise rate |  | Fair value (R$)
Non-deliverable forward |  | EUR |  | BRL |  | 1st Qtr. 2021 |  | EUR | 265,000 |  | 6.2671 |  | 32,015
Non-deliverable forward |  | USD |  | BRL |  | 1st Qtr. 2021 |  | USD | 340,000 |  | 5.1077 |  | 27,023
Non-deliverable forward |  | USD |  | BRL |  | 2nd Qtr. 2021 |  | USD | 50,000 |  | 5.2800 |  | (4,525)
Futures - B3 |  | BRL |  | USD |  | 1st Qtr. 2021 |  | USD | 553,000 |  | 5.1797 |  | (9,086)
Non-deliverable forward |  | EUR |  | JPY |  | 1st Qtr. 2021 |  | EUR | 19,789 |  | 126.3299 |  | 704
Non-deliverable forward |  | USD |  | EUR |  | 1st Qtr. 2021 |  | EUR | 75,000 |  | 1.2274 |  | (1,888)
Non-deliverable forward |  | EUR |  | RUB |  | 1st Qtr. 2021 |  | EUR | 20,836 |  | 91.1883 |  | 2,655
Collar |  | TRY |  | USD |  | 1st Qtr. 2021 |  | USD | 50,000 |  | 7.8800 |  | 8,544
Total |  |  |  |  |  |  |  |  |  |  |  |  | 55,442
| ii. | Operating income exposure
The Risk Policy regarding operating income exposure has the objective to hedge revenues and costs denominated in foreign currencies. The Company is supported by internal models to measure and monitor these risks, and uses financial instruments for hedging, designating the relations as cash flow hedges. The derivative and non-derivative financial instruments designated as cash flow hedges for foreing exchange operating income exposure on December 31, 2020 are set forth below:
12.31.20
Cash flow hedge - Derivative instruments |  | Hedged object |  | Asset |  | Liability |  | Maturity |  | Notional |  | Designation rate |  | Fair value
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 1st Qtr. 2021 |  | USD | 241,000 |  | 5.4084 |  | 53,721
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 2nd Qtr. 2021 |  | USD | 25,000 |  | 5.6329 |  | 10,964
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 3rd Qtr. 2021 |  | USD | 5,000 |  | 5.8018 |  | 2,940
Collar |  | USD Exports |  | BRL |  | USD |  | 1st Qtr. 2021 |  | USD | 132,000 |  | 4.9158 |  | (33,764)
Collar |  | USD Exports |  | BRL |  | USD |  | 2nd Qtr. 2021 |  | USD | 45,000 |  | 5.3785 |  | 10,110
Collar |  | USD Exports |  | BRL |  | USD |  | 3rd Qtr. 2021 |  | USD | 45,000 |  | 5.5933 |  | 18,967
Collar |  | USD Exports |  | BRL |  | USD |  | 4th Qtr. 2021 |  | USD | 10,000 |  | 5.7500 |  | 5,457
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 68,395
12.31.20
Cash flow hedge - Non-derivative instruments |  | Hedged object |  |  |  | Liability |  | Maturity |  | Notional |  | Designation rate |  | Fair value (1)
Bond BRF SA BRFSBZ 5 7/8 (2) |  | USD Exports |  |  |  | USD |  | 2nd Qtr. 2022 |  | USD | 70,928 |  | 2.0213 |  | (409,518)
Bond BRF SA BRFSBZ 3.95 |  | USD Exports |  |  |  | USD |  | 2nd Qtr. 2023 |  | USD | 150,000 |  | 2.0387 |  | (473,700)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | (883,218)
(1) | Corresponds to the effective portion of the hedge result accumulated in Other Comprehensive Income.
(2) | For this instrument, the initial designation was of USD150,000, however there were repurchases with corresponding revocation of the designation in the amounts of USD31,338 at the rate of 3.2408, USD9,350 at the rate of 4.1827, USD27,190 at the rate of 5.1889 e USD11,194 at the rate of 5.5714. The accumulated exchange rate variation of the revoked portions is fixed and reserved in Other Comprehensive Income until the recognition of the hedge object in the second quarter of 2022.
| iii. | Investments exposure
The Company holds investments abroad in functional currencies different than the Brazilian Real, which generate currency exposure that affects directly the Company’s Equity, in Other Comprehensive Income. The non-derivative financial instruments designated as net investment hedge instruments on December 31, 2020 are set forth below:
12.31.20
Net investment hedge - Non-derivative instruments |  | Object (Investment) |  | Liability |  | Maturity |  | Notional |  | Rate |  | Fair value (1)
Bond - BRF SA BRFSBZ 4.35 |  | Federal Foods LLC |  | USD |  | 3rd Qtr. 2026 |  | USD | 75,673 |  | 3.7649 |  | (108,991)
Bond - BRF SA BRFSBZ 4.35 |  | BRF Al Yasra Food |  | USD |  | 3rd Qtr. 2026 |  | USD | 108,757 |  | 3.7649 |  | (142,280)
Bond - BRF SA BRFSBZ 4.35 |  | Al Khan Foodstuff LLC |  | USD |  | 3rd Qtr. 2026 |  | USD | 65,570 |  | 3.7649 |  | (93,403)
|  |  |  |  |  |  |  |  |  |  |  |  | (344,674)
| (1) | Corresponds to the effective portion of the hedge result accumulated in Other Comprehensive Income.
23.4.3. | Commodities price risk
In the ordinary course of business, the Company purchases commodities, mainly corn, soybean, soybean meal and soybean oil, individual components of the production costs. Corn and soy prices are subject to volatility resulting from weather conditions, harvest productivity, transport and warehouse costs, government agricultural policies, FX rates and international market prices, among other factors. The Risk Policy establishes coverage limits to the flow of purchases of corn and soy with the purpose of reducing the impact due to a price increase of these raw materials. The hedge may be reached using derivatives or by inventory management. The financial instruments designated as cash flow hedges and fair value hedges for the commodities price exposure on December 31, 2020 are set forth below:
12.31.20
Cash flow hedge - Derivative instruments |  | Hedged object |  | Index |  | Maturity |  | Quantity |  | Exercise rate (USD/Ton) |  | Fair value
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 1st Qtr. 2021 |  | 5,000 | ton |  | 430.69 |  | 1,062
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 2nd Qtr. 2021 |  | 80,995 | ton |  | 372.18 |  | 38,447
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 3rd Qtr. 2021 |  | 128,995 | ton |  | 381.44 |  | 28,387
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 4th Qtr. 2021 |  | 9,999 | ton |  | 390.12 |  | 590
Collar - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 1st Qtr. 2021 |  | 4,990 | ton |  | 465.17 |  | 939
Collar - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 2nd Qtr. 2021 |  | 9,072 | ton |  | 462.42 |  | 1,970
Collar - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 4th Qtr. 2021 |  | 4,990 | ton |  | 402.67 |  | 431
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 2nd Qtr. 2021 |  | 19,098 | ton |  | 762.42 |  | 13,524
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 3rd Qtr. 2021 |  | 18,098 | ton |  | 731.37 |  | 12,892
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 4th Qtr. 2021 |  | 1,000 | ton |  | 825.63 |  | 123
Collar - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 3rd Qtr. 2021 |  | 2,994 | ton |  | 861.57 |  | 1,396
Collar - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 4th Qtr. 2021 |  | 2,994 | ton |  | 858.26 |  | 1,376
|  |  |  |  |  |  |  |  |  |  |  |  | 101,137
12.31.20
Fair value hedge - Derivative instruments |  | Hedged object |  | Index |  | Maturity |  | Quantity |  | Exercise rate (1) |  | Fair value
Non-deliverable forward - sell |  | Soybean purchase - fixed price |  | Soybean - CBOT |  | 1st Qtr. 2021 |  | 26,322 | ton |  | 411.58 |  | (9,063)
Non-deliverable forward - sell |  | Soybean purchase - fixed price |  | Soybean - CBOT |  | 2nd Qtr. 2021 |  | 29,998 | ton |  | 399.35 |  | (11,788)
Non-deliverable forward - sell |  | Soybean purchase - fixed price |  | Soybean - CBOT |  | 3rd Qtr. 2021 |  | 19,999 | ton |  | 383.18 |  | (7,955)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 1st Qtr. 2021 |  | 16,573 | ton |  | 140.98 |  | (3,946)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 2nd Qtr. 2021 |  | 743,321 | ton |  | 147.47 |  | (148,541)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 3rd Qtr. 2021 |  | 239,954 | ton |  | 142.95 |  | (39,015)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 4th Qtr. 2021 |  | 175,433 | ton |  | 146.65 |  | (21,643)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 1st Qtr. 2022 |  | 9,998 | ton |  | 153.33 |  | (727)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 2nd Qtr. 2021 |  | 36,801 | ton |  | 1,040.42 |  | (479)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 3rd Qtr. 2021 |  | 95,364 | ton |  | 972.98 |  | (1,102)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 4th Qtr. 2021 |  | 6,480 | ton |  | 847.38 |  | (94)
Collar - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 3rd Qtr. 2021 |  | 9,990 | ton |  | 1,104.39 |  | (841)
|  |  |  |  |  |  |  |  |  |  |  |  | (245,194)
(1) Base price of each commodity in USD/ton, except for Corn – B3 denominated in R$/ton.
12.31.20
Fair value hedge - Derivative instruments |  | Protection object |  | Assets |  | Liabilities |  | Maturity |  | Notional |  | Exercise rate |  | Fair value
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 1st Qtr. 2021 |  | USD | 13,170 |  | 5.4056 |  | 2,939
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 2nd Qtr. 2021 |  | USD | 121,597 |  | 5.2471 |  | 5,340
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 3rd Qtr. 2021 |  | USD | 41,966 |  | 5.5286 |  | 12,692
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 4th Qtr. 2021 |  | USD | 25,727 |  | 5.4991 |  | 5,958
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 1st Qtr. 2022 |  | USD | 1,533 |  | 5.4651 |  | 234
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 27,163
23.5. | Effects of hedge instruments on financial information
The effects of financial instruments for hedging exchange rate, commodities price and interest rates in the income for the year, in Other Comprehensive Income and in the financial position are set forth below:
Income for the year |  |  |  |  |  |  |  |  |  |
12.31.20 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Net Sales |  |  |  |  |  |  |  | 40,841,803 |  | - |  | - |  | 40,841,803
Derivatives result |  |  |  | Operating Results |  | Cash flow |  | (1,372,103) |  | - |  | - |  | (1,372,103)
Net Revenue |  | 25 |  |  |  |  |  | 39,469,700 |  | - |  | - |  | 39,469,700
Cost of Sales |  |  |  |  |  |  |  | - |  | (29,816,160) |  | - |  | (29,816,160)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (182,662) |  | - |  | (182,662)
Cost of Sales |  |  |  |  |  |  |  | - |  | (29,998,822) |  | - |  | (29,998,822)
Interests on loans and borrowings |  |  |  |  |  |  |  | - |  | - |  | (1,545,825) |  | (1,545,825)
Interest Rate Derivatives result |  |  |  | Interest expenses |  | Cash flow |  | - |  | - |  | (32,909) |  | (32,909)
Foreign Exchange variation on assets and liabilities |  |  |  |  |  |  |  | (1,179,236) |  | - |  | - |  | (1,179,236)
Foreign Exchange Derivatives result |  |  |  | Financial Position |  | Not designated |  | 981,847 |  | - |  | - |  | 981,847
Effects on Financial Result |  | 27 |  |  |  |  |  | (197,389) |  | - |  | (1,578,734) |  | (1,776,123)
Other Comprehensive Income |  |  |  |  |  |  |  |  |  |
12.31.20 |  |  |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | (28,893) |  | 211,751 |  | - |  | 182,858
Non-derivative Instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | (306,340) |  | - |  | - |  | (306,340)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (277,856) |  | - |  | - |  | (277,856)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | (613,089) |  | 211,751 |  | - |  | (401,338)
| (1) | All effects are presented gross of taxes.
Statement of financial position |  |  |  |  |  |  |  |  |  |
12.31.20 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Designated derivatives |  |  |  | Operating Results |  | Cash flow / Fair value |  | 95,558 |  | (144,057) |  | - |  | (48,499)
Not designated derivatives |  |  |  | Financial Position |  | Not designated |  | 55,442 |  | - |  | (14,649) |  | 40,793
Asset / (Liability) net |  |  |  |  |  |  |  | 151,000 |  | (144,057) |  | (14,649) |  | (7,706)
Derivative Instruments - current (2) |  |  |  | Operating Results |  | Cash flow |  | 47,942 |  | 171,306 |  | - |  | 219,248
Non-derivative instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | (883,218) |  | - |  | - |  | (883,218)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (344,674) |  | - |  | - |  | (344,674)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | (1,179,950) |  | 171,306 |  | - |  | (1,008,644)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | 442,398 |  | - |  | 442,398
Inventories |  | 7 |  |  |  |  |  | - |  | 442,398 |  | - |  | 442,398
(1) | All effects are presented gross of taxes.
(2) | Includes R$6,251 related to the time value of the foreign exchange option contracts, and R$6,178 related to the time value of the commodity options contracts.
Income for the year |  |  |  |  |  |  |  |  |  |
12.31.19 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Net Sales |  |  |  |  |  |  |  | 33,465,194 |  | - |  | - |  | 33,465,194
Derivatives result |  |  |  | Operating Results |  | Cash flow |  | (18,214) |  | - |  | - |  | (18,214)
Net Revenue |  | 25 |  |  |  |  |  | 33,446,980 |  | - |  | - |  | 33,446,980
Cost of Sales |  |  |  |  |  |  |  | - |  | (25,339,804) |  | - |  | (25,339,804)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (30,238) |  | - |  | (30,238)
Cost of Sales |  |  |  |  |  |  |  | - |  | (25,370,042) |  | - |  | (25,370,042)
Interests on loans and borrowings |  |  |  |  |  |  |  | - |  | - |  | (1,516,677) |  | (1,516,677)
Interest Rate Derivatives result |  |  |  | Interest expenses |  | Cash flow |  | - |  | - |  | 5,173 |  | 5,173
Foreign Exchange variation on assets and liabilities |  |  |  |  |  |  |  | 100,480 |  | - |  | - |  | 100,480
Foreign Exchange Derivatives result |  |  |  | Financial Position |  | Not designated |  | (178,523) |  | - |  | - |  | (178,523)
Effects on Financial Result |  | 27 |  |  |  |  |  | (78,043) |  | - |  | (1,511,504) |  | (1,589,547)
Other Comprehensive Income |  |  |  |  |  |  |  |  |  |
12.31.19 |  |  |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | 46,110 |  | (14,056) |  | - |  | 32,054
Non-derivative Instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | 23,328 |  | - |  | - |  | 23,328
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (66,818) |  | - |  | - |  | (66,818)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | 2,620 |  | (14,056) |  | - |  | (11,436)
Statement of financial position |  |  |  |  |  |  |  |  |  |
12.31.19 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Designated derivatives |  |  |  | Operating Results |  | Cash flow / Fair value |  | 93,312 |  | (23,638) |  | - |  | 69,674
Not designated derivatives |  |  |  | Financial Position |  | Not designated |  | 22,026 |  | - |  | - |  | 22,026
Asset / (Liability) net |  |  |  |  |  |  |  | 115,338 |  | (23,638) |  | - |  | 91,700
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | 76,835 |  | (40,445) |  | - |  | 36,390
Non-derivative Instruments - non-current |  |  |  | Operating Results |  | Cash flow |  | (576,877) |  | - |  | - |  | (576,877)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (66,818) |  | - |  | - |  | (66,818)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | (566,860) |  | (40,445) |  | - |  | (607,305)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | 47,374 |  | - |  | 47,374
Inventories |  | 7 |  |  |  |  |  | - |  | 47,374 |  | - |  | 47,374
| (1) | All effects are presented gross of taxes.
In the Statement of Cash Flows, the effect of the derivative financial instruments designated as hedge accounting is presented in the line item in which the hedged object is recorded. For the instruments not designated, the effects are presented in the Derivative Financial Instruments line item. Summarized financial position of derivative financial instruments:
| 12.31.20 |  | 12.31.19
Asset |  |  |
Designated as hedge accounting |  |  |
Currency derivatives | 177,208 |  | 166,729
Commodities derivatives | 125,304 |  | 25,191
Not designated as hedge accounting |  |  |
Currency derivatives | 75,478 |  | 53,395
| 377,990 |  | 245,315
Current assets | 377,756 |  | 195,324
Non-current assets | 234 |  | 49,991
Liabilities |  |  |
Designated as hedge accounting |  |  |
Currency derivatives | (81,650) |  | (73,417)
Commodities derivatives | (269,361) |  | (48,829)
Not designated as hedge accounting |  |  |
Currency derivatives | (20,036) |  | (31,369)
Interest rate derivatives | (14,649) |  | -
| (385,696) |  | (153,615)
Current liabilities | (384,969) |  | (153,612)
Non-current liabilities | (727) |  | (3)
23.6. | Sensitivity analysis
The Management understands that the most relevant risks that may affect the Company’s results are the volatility of commodities prices and foreign exchange rates. Currently the fluctuation of the interest rates does not affect significantly the Company’s results since Management has chosen to keep at fixed rates a considerable portion of its debts. The amounts below represent the possible impacts (incremental results) of the hedging instruments and their respective hedged positions, considering situations of increase and decrease in the selected risk factors. The information used in the preparation of the analysis is based on the position as of December 31, 2020, which has been described in the items above. The future results may diverge significantly of the estimated values if the reality presents different than the assumptions used. Positive values indicate gains and negative values indicate losses.
|  | Scenario
Exchange rate - Balance |  | Base |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.1967 |  | 2.5984 |  | 3.8975 |  | 4.6770 |  | 5.7164 |  | 6.4959 |  | 7.7951
Monetary Assets and Liabilities |  |  |  | 2,891,741 |  | 1,445,871 |  | 578,348 |  | (578,348) |  | (1,445,871) |  | (2,891,741)
Derivative Instruments - Not designated |  |  |  | (2,678,513) |  | (1,339,257) |  | (535,703) |  | 535,703 |  | 1,339,257 |  | 2,678,513
Net effect |  |  |  | 213,228 |  | 106,614 |  | 42,645 |  | (42,645) |  | (106,614) |  | (213,228)
EUR |  | 6.3935 |  | 3.1968 |  | 4.7951 |  | 5.7542 |  | 7.0329 |  | 7.9919 |  | 9.5903
Monetary Assets and Liabilities |  |  |  | 684,591 |  | 342,295 |  | 136,918 |  | (136,918) |  | (342,295) |  | (684,591)
Derivative Instruments - Not designated |  |  |  | (736,988) |  | (368,494) |  | (147,398) |  | 147,398 |  | 368,494 |  | 736,988
Net effect |  |  |  | (52,397) |  | (26,199) |  | (10,480) |  | 10,480 |  | 26,199 |  | 52,397
JPY |  | 0.0503 |  | 0.0252 |  | 0.0377 |  | 0.0453 |  | 0.0553 |  | 0.0629 |  | 0.0755
Monetary Assets and Liabilities |  |  |  | (77,886) |  | (38,943) |  | (15,577) |  | 15,577 |  | 38,943 |  | 77,886
Derivative Instruments - Not designated |  |  |  | 62,925 |  | 31,463 |  | 12,585 |  | (12,585) |  | (31,463) |  | (62,925)
Net effect |  |  |  | (14,961) |  | (7,480) |  | (2,992) |  | 2,992 |  | 7,480 |  | 14,961
RUB |  | 0.0698 |  | 0.0349 |  | 0.0524 |  | 0.0628 |  | 0.0768 |  | 0.0873 |  | 0.1047
Monetary Assets and Liabilities |  |  |  | (65,717) |  | (32,858) |  | (13,143) |  | 13,143 |  | 32,858 |  | 65,717
Derivative Instruments - Not designated |  |  |  | 66,348 |  | 33,174 |  | 13,270 |  | (13,270) |  | (33,174) |  | (66,348)
Net effect |  |  |  | 631 |  | 316 |  | 127 |  | (127) |  | (316) |  | (631)
TRY |  | 0.7061 |  | 0.3531 |  | 0.5296 |  | 0.6355 |  | 0.7767 |  | 0.8826 |  | 1.0592
Monetary Assets and Liabilities |  |  |  | 51,616 |  | 25,808 |  | 10,323 |  | (10,323) |  | (25,808) |  | (51,616)
Derivative Instruments - Not designated |  |  |  | (141,926) |  | (70,963) |  | (28,385) |  | 28,385 |  | 70,963 |  | 141,926
Net effect |  |  |  | (90,310) |  | (45,155) |  | (18,062) |  | 18,062 |  | 45,155 |  | 90,310
|  | Scenario
Exchange rate - Operating results |  | Base |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.1967 |  | 2.5984 |  | 3.8975 |  | 4.6770 |  | 5.7164 |  | 6.4959 |  | 7.7951
Revenue in USD |  |  |  | (1,881,018) |  | (940,509) |  | (376,204) |  | 376,204 |  | 940,509 |  | 1,881,018
NDF |  |  |  | 704,153 |  | 352,076 |  | 140,831 |  | (140,831) |  | (352,076) |  | (704,153)
Collar |  |  |  | 581,264 |  | 279,855 |  | 114,019 |  | (94,283) |  | (260,303) |  | (561,712)
Loans - Designated |  |  |  | 574,048 |  | 287,025 |  | 114,810 |  | (114,810) |  | (287,025) |  | (574,048)
Net effect |  |  |  | (21,553) |  | (21,553) |  | (6,544) |  | 26,280 |  | 41,105 |  | 41,105
|  | Scenario
Exchange rate - Operating results |  | Base |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.1967 |  | 2.5984 |  | 3.8975 |  | 4.6770 |  | 5.7164 |  | 6.4959 |  | 7.7951
Cost of Sales |  |  |  | (530,044) |  | (265,022) |  | (106,009) |  | 106,009 |  | 265,022 |  | 530,044
NDF |  |  |  | 530,044 |  | 265,022 |  | 106,009 |  | (106,009) |  | (265,022) |  | (530,044)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
|  | Scenario
Operating results - Commodities |  | Base (1) |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
Soy Grain - CBOT |  | 475 |  | 238 |  | 356 |  | 428 |  | 523 |  | 594 |  | 713
Cost of Sales |  |  |  | (18,132) |  | (9,066) |  | (3,626) |  | 3,626 |  | 9,066 |  | 18,132
NDF |  |  |  | 18,132 |  | 9,066 |  | 3,626 |  | (3,626) |  | (9,066) |  | (18,132)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
Soybean Meal - CBOT |  | 430 |  | 215 |  | 322 |  | 387 |  | 473 |  | 537 |  | 645
Cost of Sales |  |  |  | 52,458 |  | 26,229 |  | 10,492 |  | (10,492) |  | (26,229) |  | (52,458)
Collar |  |  |  | (3,267) |  | (1,126) |  | (97) |  | 753 |  | 2,038 |  | 4,180
NDF |  |  |  | (48,363) |  | (24,181) |  | (9,673) |  | 9,673 |  | 24,181 |  | 48,363
Net effect |  |  |  | 828 |  | 922 |  | 722 |  | (66) |  | (10) |  | 85
Soybean Oil - CBOT |  | 770 |  | 385 |  | 578 |  | 693 |  | 847 |  | 963 |  | 1,156
Cost of Sales |  |  |  | 17,020 |  | 8,510 |  | 3,404 |  | (3,404) |  | (8,510) |  | (17,020)
Collar |  |  |  | (1,775) |  | (488) |  | - |  | 450 |  | 1,222 |  | 2,509
NDF |  |  |  | (14,714) |  | (7,357) |  | (2,943) |  | 2,943 |  | 7,357 |  | 14,714
Net effect |  |  |  | 531 |  | 665 |  | 461 |  | (11) |  | 69 |  | 203
Corn - CBOT |  | 184 |  | 92 |  | 138 |  | 165 |  | 202 |  | 230 |  | 276
Cost of Sales |  |  |  | (108,892) |  | (54,446) |  | (21,778) |  | 21,778 |  | 54,446 |  | 108,892
NDF |  |  |  | 108,892 |  | 54,446 |  | 21,778 |  | (21,778) |  | (54,446) |  | (108,892)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
Corn - B3 |  | 1,199 |  | 600 |  | 899 |  | 1,079 |  | 1,319 |  | 1,499 |  | 1,799
Cost of Sales |  |  |  | (5,990) |  | (2,995) |  | (1,198) |  | 1,198 |  | 2,995 |  | 5,990
Collar |  |  |  | 5,143 |  | 2,148 |  | - |  | (1,198) |  | (2,995) |  | (5,990)
Net effect |  |  |  | (847) |  | (847) |  | (1,198) |  | - |  | - |  | -
| (1) | Base price of each commodity in USD/ton, except for Corn – B3 denominated in R$/ton.
23.7. | Financial instruments by category
| 12.31.20
| Amortized cost |  | Fair value through other comprehensive income |  | Fair value through profit and loss |  | Total
|  | Equity instruments |  | Debt instruments |  |
Assets |  |  |  |  |  |  |  |  |
Cash and bank | 2,439,072 |  | - |  | - |  | - |  | 2,439,072
Cash equivalents | - |  | - |  | - |  | 5,137,553 |  | 5,137,553
Marketable securities | 287,504 |  | 42,029 |  | - |  | 329,202 |  | 658,735
Restricted cash | 24,358 |  | - |  | - |  | - |  | 24,358
Trade accounts receivable | 3,789,616 |  | - |  | - |  | 310,265 |  | 4,099,881
Other receivables | 86,404 |  | - |  | - |  | - |  | 86,404
Derivatives not designated | - |  | - |  | - |  | 75,478 |  | 75,478
Derivatives designated as hedge accounting (1) | - |  | - |  | - |  | 302,512 |  | 302,512
Liabilities |  |  |  |  |  |  |  |  |
Trade accounts payable | (9,009,987) |  | - |  | - |  | - |  | (9,009,987)
Supply chain finance | (1,452,637) |  | - |  | - |  | - |  | (1,452,637)
Loans and borrowings (2) | (22,404,426) |  | - |  | - |  | - |  | (22,404,426)
Derivatives not designated | - |  | - |  | - |  | (34,685) |  | (34,685)
Derivatives designated as hedge accounting (1) | - |  | - |  | - |  | (351,011) |  | (351,011)
Written option– business combination | - |  | - |  | - |  | (185,401) |  | (185,401)
| (26,240,096) |  | 42,029 |  | - |  | 5,583,913 |  | (20,614,154)
(1) | All derivatives are measured at fair value. Those designated as hedge accounting have their gains and losses also affecting other comprehensive income and inventories.
(2) | All loans and borrowings are measured at amortized cost. Those designated as hedge accounting have their gains and losses also affecting shareholders’ equity.
| 12.31.19
| Amortized cost |  | Fair value through other comprehensive income |  | Fair value through profit and loss |  | Total
|  | Equity instruments |  | Debt instruments |  |
Assets |  |  |  |  |  |  |  |  |
Cash and bank | 2,289,787 |  | - |  | - |  | - |  | 2,289,787
Cash equivalents | - |  | - |  | - |  | 1,947,998 |  | 1,947,998
Marketable securities | 265,783 |  | 26,678 |  | 19,285 |  | 413,788 |  | 725,534
Restricted cash | 296,294 |  | - |  | - |  | - |  | 296,294
Trade accounts receivable | 2,811,902 |  | - |  | - |  | 225,941 |  | 3,037,843
Other receivables | 123,877 |  | - |  | - |  | - |  | 123,877
Derivatives not designated | - |  | - |  | - |  | 53,395 |  | 53,395
Derivatives designated as hedge accounting | - |  | - |  | - |  | 191,920 |  | 191,920
Liabilities |  |  |  |  |  |  |  |  |
Trade accounts payable | (5,796,766) |  | - |  | - |  | - |  | (5,796,766)
Supply chain finance | (842,037) |  | - |  | - |  | - |  | (842,037)
Loans and borrowings | (18,620,279) |  | - |  | - |  | - |  | (18,620,279)
Derivatives not designated | - |  | - |  | - |  | (31,369) |  | (31,369)
Derivatives designated as hedge accounting | - |  | - |  | - |  | (122,246) |  | (122,246)
Written option– business combination | - |  | - |  | - |  | (706,920) |  | (706,920)
| (19,471,439) |  | 26,678 |  | 19,285 |  | 1,972,507 |  | (17,452,969)
23.8. | Fair value of financial instruments
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the inputs used for measurement, the financial instruments at fair value may be classified into 3 hierarchy levels:
| » | Level 1 – Uses quoted prices (unadjusted) for identical instruments in active markets. In this category are classified investments in stocks, savings accounts, overnights, term deposits, Financial Treasury Bills (“LFT”) and investment funds;
| » | Level 2 – Uses prices quoted in active markets for similar instruments, prices quoted for identical or similar instruments in non-active markets and evaluation models for which inputs are observable. In this level are classified the investments in Bank Deposit Certificates (“CDB”) and derivatives, which are measured by well-known pricing models: discounted cash flows and Black-Scholes. The observable inputs are interest rates and curves, volatility factors and foreign exchange rates;
| » | Level 3 – Instruments for which significant inputs are non-observable. The Company has a financial liability arising from a put option written in the context of a business combination.
The table below presents the overall classification of financial instruments measured at fair value by measurement hierarchy. For the year ended on December 31, 2020, there were no changes among the 3 levels of hierarchy.
| 12.31.20 |  | 12.31.19
| Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit linked notes | - |  | - |  | - |  | - |  | 19,285 |  | - |  | - |  | 19,285
Stocks | 42,029 |  | - |  | - |  | 42,029 |  | 26,678 |  | - |  | - |  | 26,678
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Savings account and overnight | 1,220,232 |  | - |  | - |  | 1,220,232 |  | 689,874 |  | - |  | - |  | 689,874
Term deposits | 250,189 |  | - |  | - |  | 250,189 |  | 374,859 |  | - |  | - |  | 374,859
Bank deposit certificates | - |  | 3,662,448 |  | - |  | 3,662,448 |  | - |  | 879,758 |  | - |  | 879,758
Financial treasury bills | 312,515 |  | - |  | - |  | 312,515 |  | 396,994 |  | - |  | - |  | 396,994
Investment funds | 21,371 |  | - |  | - |  | 21,371 |  | 20,301 |  | - |  | - |  | 20,301
Trade accounts receivable | - |  | 310,265 |  | - |  | 310,265 |  | - |  | 225,941 |  | - |  | 225,941
Derivatives | - |  | 377,990 |  | - |  | 377,990 |  | - |  | 245,315 |  | - |  | 245,315
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives | - |  | (385,696) |  | - |  | (385,696) |  | - |  | (153,615) |  | - |  | (153,615)
Written option– business combination | - |  | - |  | (185,401) |  | (185,401) |  | - |  | - |  | (706,920) |  | (706,920)
| 1,846,336 |  | 3,965,007 |  | (185,401) |  | 5,625,942 |  | 1,527,991 |  | 1,197,399 |  | (706,920) |  | 2,018,470
Except for the items set forth below, the fair value of all other financial instruments is approximate to their book value. The fair value of the bonds set forth below is based in prices observed in active markets, level 1 of the fair value hierarchy, while the debentures are based in level 2 and are measured by discounted cash flows.
|  |  |  |  |  | 12.31.20 |  | 12.31.19
|  | Currency |  | Maturity |  | Book value |  | Fair value |  | Book value |  | Fair value
BRF S.A. |  |  |  |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ 5 7/8 |  | USD |  | 2022 |  | (367,714) |  | (389,611) |  | (435,934) |  | (460,606)
BRF SA BRFSBZ 4 3/4 |  | USD |  | 2024 |  | (1,538,086) |  | (1,659,891) |  | (2,086,169) |  | (2,191,726)
BRF SA BRFSBZ 3.95 |  | USD |  | 2023 |  | (1,207,468) |  | (1,275,598) |  | (1,370,446) |  | (1,427,754)
BRF SA BRFSBZ 2 3/4 |  | EUR |  | 2022 |  | (1,081,404) |  | (1,105,478) |  | (1,492,653) |  | (1,559,476)
BRF SA BRFSBZ 4 7/8 |  | USD |  | 2030 |  | (3,951,539) |  | (4,333,054) |  | (3,022,773) |  | (3,160,573)
BRF SA BRFSBZ 5 3/4 |  | USD |  | 2050 |  | (4,106,115) |  | (4,705,851) |  | - |  | -
Debenture - 1st Issue |  | BRL |  | 2026 |  | (771,138) |  | (778,016) |  | (755,760) |  | (832,213)
Debenture - 2nd Issue |  | BRL |  | 2030 |  | (2,250,867) |  | (2,225,796) |  | - |  | -
BRF GmbH |  |  |  |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ 4.35 |  | USD |  | 2026 |  | (2,577,667) |  | (2,779,574) |  | (1,999,509) |  | (2,101,175)
|  |  |  |  |  | (17,851,998) |  | (19,252,869) |  | (11,163,244) |  | (11,733,523)
23.8.1. | Level 3 measurement
The Company holds a financial liability arising from a put option written in the context of a business combination. This option gives the non-controlling shareholder the right to sell its equity stake in the subsidiary for an amount equivalent, in Turkish Liras, to a multiple of the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of the economic group of this subsidiary in the last 12 months prior to the exercise. The exercise period is comprised of the six-month period beginning on May 25, 2021. This liability is measured at the present value of redemption amount using internal assumptions regarding the results of that economic group. The effects of the subsequent measurement resulted in a gain in financial results of R$579,946 in the year ended on December 31, 2020 (loss of R$189,816 in the year ended on December 31, 2019), as per note 27. The Company assessed the unobservable inputs used in the determination of the fair value of this instrument and observed that the premise which causes relevant impact is the expected EBITDA of the economic group object of the option. The other unobservable inputs, e.g. net debt, when submitted to the analysis have not shown relevant impacts on the fair value of the option. Below, 4 scenarios with the correspondent fair value of option are presented:
|  | Scenario
|  |  | - 50% |  | - 25% | Base |  | + 25% |  | + 50%
Written option (business combination) |  |  | (88,528) |  | (136,965) | (185,401) |  | (233,837) |  | (282,274)

X
- References No definition available. + Details
Name: | brf_DisclosureOfFinancialInstrumentsAndRisksManagementAbstract
Namespace Prefix: | brf_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The disclosure of information that enables users of financial statements to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed. [Refer: Financial instruments, class [member]] + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 7 -IssueDate 2020-01-01 -Paragraph 31 -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=7&code=ifrs-tx-2020-en-r&anchor=para_31&doctype=Standard -URIDate 2020-01-01 + Details
Name: | ifrs-full_DisclosureOfNatureAndExtentOfRisksArisingFromFinancialInstrumentsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration