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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | 12 Months Ended
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Dec. 31, 2022
Financial Instruments And Risk Management |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
| 24. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
24.1. 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, executing the formal designation of its hedge accounting relations. The Risk Policy was approved by the Board of Directors on December 15, 2022, with a maximum validity of one year and validity in 2023 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 the Company’s operating and financial results, as well as its equity from adverse changes in the market prices, particularly 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. Additionally, the Management of the Company approved the following policies on November 10, 2021, which are available at the Company’s website:
| » | Financial Policy, which aims to: (i) establish guidelines for the management of the Company's financial debt and capital structure; and (ii) guide the Company's decision-making in connection with cash management (financial investments).
| » | Profit Allocation Policy, which aims to establish the practices adopted by the Company regarding the allocation of its profits, providing, among others, the periodicity of payment of dividends and the baseline used to establish the respective amount.
24.2. 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 and 6.
| 24.2.1. | 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.
| 24.2.2. | 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, 2022, the Company held financial investments over R$100,000 at the following financial institutions: Banco Bradesco, Banco Daycoval, Banco do Brasil, Banco Pan, Banco Safra, Banco Santander, Banco Volkswagen, Banco Votorantim, Banco BNP, Banco BTG Pactual, Caixa Econômica Federal, HSBC, J.P. Morgan e XP. The Company also held derivative contracts with the following financial institutions: Banco Bradesco, Banco Itaú, Banco Safra, Banco Santander, Banco Votorantim, Bank Of America Merrill Lynch, Banco BNP, Banco BTG Pactual, Citibank, Goldman Sachs, J.P. Morgan Chase Bank, Morgan Stanley, Rabobank, T.Garanti Bankasi A.Ş. e XP. 24.3. 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. On December 31, 2022, the non-current consolidated gross debt, as presented below, represented 83.75% (86.78% as of December 31, 2021) of the total gross debt, which has an average term higher than nine years. The Company monitors the gross debt and net debt as set forth below:
Schedule of debt levels and net debt |  |  |  |  |  |  |
| 12.31.22 |  | 12.31.21
| Current |  | Non-current |  | Total |  | Total
Foreign currency loans and borrowings | (1,954,086) |  | (10,595,095) |  | (12,549,181) |  | (16,343,552)
Local currency loans and borrowings | (1,925,788) |  | (9,042,031) |  | (10,967,819) |  | (9,112,478)
Derivative financial instruments, net | 38,397 |  | (164,416) |  | (126,019) |  | (223,949)
Gross debt | (3,841,477) |  | (19,801,542) |  | (23,643,019) |  | (25,679,979)
Cash and cash equivalents | 8,130,929 |  | - |  | 8,130,929 |  | 7,528,820
Marketable securities | 418,373 |  | 406,402 |  | 824,775 |  | 794,268
Restricted cash | - |  | 89,717 |  | 89,717 |  | 24,964
| 8,549,302 |  | 496,119 |  | 9,045,421 |  | 8,348,052
Net debt | 4,707,825 |  | (19,305,423) |  | (14,597,598) |  | (17,331,927)
The table below summarizes the significant commitments and contractual obligations that may impact the Company’s liquidity:
Schedule of commitments and contractual obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 12.31.22
| Book value |  | Contractual cash flow |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028 onwards
Non derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and borrowings | 23,517,000 |  | 36,139,951 |  | 4,326,351 |  | 1,602,785 |  | 2,704,626 |  | 2,263,426 |  | 4,420,322 |  | 20,822,441
Principal |  |  | 24,338,376 |  | 2,927,191 |  | 972,150 |  | 1,940,828 |  | 1,200,318 |  | 3,429,736 |  | 13,868,153
Interest |  |  | 11,801,575 |  | 1,399,160 |  | 630,635 |  | 763,798 |  | 1,063,108 |  | 990,586 |  | 6,954,288
Trade accounts payable | 12,743,087 |  | 12,924,646 |  | 12,917,187 |  | 4,115 |  | 1,725 |  | 1,619 |  | - |  | -
Supply chain finance | 1,393,137 |  | 1,421,706 |  | 1,421,706 |  | - |  | - |  | - |  | - |  | -
Lease liabilities | 3,044,934 |  | 3,854,512 |  | 723,229 |  | 638,302 |  | 534,429 |  | 419,449 |  | 322,804 |  | 1,216,299
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | 206,635 |  | 206,635 |  | 31,935 |  | 52,698 |  | - |  | - |  | 7,864 |  | 114,138
Currency derivatives | 17,551 |  | 17,551 |  | 17,551 |  | - |  | - |  | - |  | - |  | -
Commodities derivatives | 26,730 |  | 26,730 |  | 26,730 |  | - |  | - |  | - |  | - |  | -
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency derivatives | 6,251 |  | 6,251 |  | 6,251 |  | - |  | - |  | - |  | - |  | -
The Company does not expect that the cash outflows to fulfill the obligations shown above will be significantly anticipated by factors unrelated to its best interests, or have its value substantially modified outside the normal course of business. 24.4. Market risk management
| 24.4.1. | 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 volatility of such rates and manage the mismatch between its financial assets and liabilities. The Company’s exposure to interest rates is set forth below:
Schedule of exposure to interest rates |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | 12.31.22
|  |  | Notional |  |
Index |  |  | Assets |  | Liabilities |  | Derivative financial instruments |  | Exposure, Net
Fixed |  |  |  |  |  |  |  |  |
Fixed Reais |  |  | 163,403 |  | (399,625) |  | (959,700) |  | (1,195,922)
Fixed U.S. Dollars (USD) |  |  | 4,368,536 |  | (13,543,817) |  | 3,430,151 |  | (5,745,130)
Fixed Turkish Liras (TRY) |  |  | 44,676 |  | (512,500) |  | (208,708) |  | (676,532)
Fixed Euros (EUR) |  |  | 88,925 |  | - |  | 490,107 |  | 579,032
Fixed Kwanza (AOA) |  |  | 74,278 |  | - |  | - |  | 74,278
Fixed Other |  |  | 39,841 |  | - |  | - |  | 39,841
Floating |  |  |  |  |  |  |  |  |
Floating IPCA Reais |  |  | - |  | (5,574,682) |  | 4,590,000 |  | (984,682)
Floating CDI Reais |  |  | 4,265,762 |  | (2,555,558) |  | (7,341,850) |  | (5,631,646)
Floating Libor U.S. Dollars (USD) |  | - |  | (130,443) |  | - |  | (130,443)
|  |  | 9,045,421 |  | (22,716,625) |  | - |  | (13,671,204)
Interest and fair value adjustment of derivatives | - |  | (800,375) |  | (126,019) |  | (926,394)
Total |  |  | 9,045,421 |  | (23,517,000) |  | (126,019) |  | (14,597,598)
The derivative financial instruments used to hedge the exposure to interest rates as of December 31, 2022 are presented in the table below:
Schedule of derivative financial instruments used to hedge the exposure to interest rates |  |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
|  |  |  |  |  |  |  |  |  |  |  |  | Fair value (R$)
Fair value hedge - Derivative instruments |  | Hedged Object |  | Maturity |  | Asset |  | Liability |  | Notional |  | Instrument |  | Object (1)
Interest rate swap |  | Debenture - 1st Issue - 3rd series - IPCA + 5.50% p.a. |  | 2nd Qtr. 2026 |  | IPCA + 5.50% p.a. |  | CDI + 0.29% p.a. |  | 400,000 | BRL | 8,183 |  | 7,290
Interest rate swap |  | Debenture - 2nd Issue - 1st series - IPCA + 5.30% p.a. |  | 3rd Qtr. 2027 |  | IPCA + 5.30% p.a. |  | CDI + 2.16% p.a. |  | 705,000 | BRL | (7,864) |  | 73,656
Interest rate swap |  | Debenture - 2nd Issue - 2nd series - IPCA + 5.60% p.a. |  | 3rd Qtr. 2030 |  | IPCA + 5.60% p.a. |  | CDI + 2.29% p.a. |  | 1,495,000 | BRL | (66,888) |  | 194,763
Interest rate swap |  | Debenture - 3rd Issue - single series - IPCA + 4.78% p.a. |  | 2nd Qtr. 2031 |  | IPCA + 4.78% p.a. |  | CDI + 0.12% p.a. |  | 1,000,000 | BRL | (8,296) |  | 75,119
Interest rate swap |  | Debenture - 1st Issue - 1st series - IPCA + 6.83% p.a. |  | 3rd Qtr. 2032 |  | IPCA + 6.83% p.a. |  | 109.32% CDI |  | 990,000 | BRL | (37,620) |  | (1,951)
|  |  |  |  |  |  |  |  |  | 4,590,000 |  |  | (112,485) |  | 348,877
| (1) | Corresponds to the accumulated amount of fair value hedge adjustments on the hedged items, included in the carrying amount of the debentures.
| 24.4.2. | Foreign exchange risk
The 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:
Schedule of assets and liabilities denominated in foreign currency |  |  |  |
|  | 12.31.22 |  | 12.31.21
Cash and cash equivalents |  | 3,691,668 |  | 2,064,631
Trade accounts receivable |  | 6,013,713 |  | 6,377,104
Trade accounts payable |  | (1,484,810) |  | (1,221,354)
Loans and borrowings |  | (12,241,309) |  | (16,726,412)
Other assets and liabilities, net |  | 35,371 |  | 49,732
Exposure of assets and liabilities in foreign currencies |  | (3,985,367) |  | (9,456,299)
Derivative financial instruments (hedge) |  | 3,721,930 |  | 8,454,971
Exposure in result, net |  | (263,437) |  | (1,001,328)
The net P&L exposure is mainly composed of the following currencies:
Schedule of net P&L exposure |  |  |  |
Net P&L Exposure |  | 12.31.22 |  | 12.31.21
Argentinian Peso (ARS) |  | (4,614) |  | (5,783)
Angolan kwanza (AOA) |  | 53,723 |  | 318,660
Euros (EUR) |  | (43,445) |  | 33,381
Chilean Pesos (CLP) |  | 256,121 |  | 169,301
Yen (JPY) |  | (3,268) |  | 77,178
Turkish Liras (TRY) |  | 214,936 |  | 266,541
U.S. Dollars (USD) |  | (736,890) |  | (1,860,606)
Total |  | (263,437) |  | (1,001,328)
The Company is exposed to other currencies, although they have been grouped in the currencies above due to its high correlation or for not being individually significant. The Company holds more financial liabilities in foreign currencies than assets and, therefore, holds derivative financial instruments to reduce such exposure. The derivative financial instruments acquired to hedge the foreign currency statement of financial position exposure on December 31, 2022 and are set forth below:
Schedule of derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
Derivative instruments not designated |  | Asset |  | Liability |  | Maturity |  | Notional |  | Exercise rate |  | Fair value (R$)
Non-deliverable forward |  | EUR |  | BRL |  | 1st Qtr. 2023 |  | EUR | 88,000 |  | 5.7452 |  | (2,059)
Futures - B3 |  | USD |  | BRL |  | 1st Qtr. 2023 |  | USD | 90,000 |  | 5.3240 |  | 3,939
Non-deliverable forward |  | USD |  | TRY |  | 1st Qtr. 2023 |  | USD | 30,000 |  | 19.2285 |  | (1,294)
Non-deliverable forward |  | USD |  | TRY |  | 2nd Qtr. 2023 |  | USD | 10,000 |  | 20.0300 |  | (2,898)
|  |  |  |  |  |  |  |  |  |  |  |  | (2,312)
Schedule of fair value hedge - derivative instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
|  |  |  |  |  |  |  |  |  |  |  |  | Fair value (R$)
Fair value hedge - Derivative instruments |  | Hedged Object |  | Maturity |  | Asset |  | Liability |  | Notional |  | Instrument |  | Object (1)
FX and interest rate swap |  | BRF SA BRFSBZ 3.95 |  | 2nd Qtr. 2023 |  | FX + 3,95% p.a. |  | 98.77% CDI |  | 234,033 | USD | (31,935) |  | 39,107
FX and interest rate swap |  | BRF SA BRFSBZ 4 3/4 |  | 3rd Qtr. 2024 |  | FX + 4,75% p.a. |  | 104.48% CDI |  | 295,363 | USD | (52,698) |  | 22,058
|  |  |  |  |  |  |  |  |  | 529,396 |  |  | (84,633) |  | 61,165
| (1) | Corresponds to the accumulated amount of fair value hedge adjustments on the hedged items, included in the carrying amount of the senior unsecured notes.
| 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 Company has more sales in foreign currency than expenditures and, therefore, holds derivative financial instruments to reduce such exposure. The derivative financial instruments designated as cash flow hedges for foreing exchange operating income exposure on December 31, 2022 are set forth below:
Schedule of operating income exposure |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
Cash flow hedge - Derivative instruments |  | Hedged object |  | Asset |  | Liability |  | Maturity |  | Notional |  | Designation rate |  | Fair value
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 1st Qtr. 2023 |  | USD | 268,000 |  | 5.3950 |  | 27,249
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 2nd Qtr. 2023 |  | USD | 25,000 |  | 5.5406 |  | 3,337
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 4th Qtr. 2023 |  | USD | 3,000 |  | 5.5740 |  | (53)
Collar |  | USD Exports |  | BRL |  | USD |  | 1st Qtr. 2023 |  | USD | 130,000 |  | 5.3785 |  | 2,437
Collar |  | USD Exports |  | BRL |  | USD |  | 2nd Qtr. 2023 |  | USD | 50,000 |  | 5.5296 |  | 2,929
Collar |  | USD Exports |  | BRL |  | USD |  | 3rd Qtr. 2023 |  | USD | 15,000 |  | 5.6892 |  | 1,273
Collar |  | USD Exports |  | BRL |  | USD |  | 4th Qtr. 2023 |  | USD | 5,000 |  | 5.7500 |  | 503
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 37,675
| iii. | Investments exposure
The Company holds both investments (net assets) and loans (financial liabilities) denominated in foreign currency. To balance the accounting effects of such exposures, some non-derivative financial liabilities are designated as hedging instruments for the investments exposure. The non-derivative financial instruments designated as net investment hedge instruments on December 31, 2022 are set forth below:
Schedule of investments exposure |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
Net investment hedge - Non-derivative instruments |  | Object (Investment) |  | Liability |  | Maturity |  | Notional |  | Rate |  | Exchange variation (1)
Bond - BRF SA BRFSBZ 4.35 |  | Federal Foods LLC |  | USD |  | 3rd Qtr. 2026 |  | USD (2) | 75,673 |  | 3.7649 |  | (110,672)
Bond - BRF SA BRFSBZ 4.35 |  | BRF Kuwait Food Management Company WLL |  | USD |  | 3rd Qtr. 2026 |  | USD (2) | 108,757 |  | 3.7649 |  | (140,614)
Bond - BRF SA BRFSBZ 4.35 |  | Al Khan Foodstuff LLC |  | USD |  | 3rd Qtr. 2026 |  | USD (2) | 65,570 |  | 3.7649 |  | (94,776)
Bond - BRF SA BRFSBZ 4.35 |  | BRF Foods GmbH |  | USD |  | 3rd Qtr. 2026 |  | USD (3) | 90,000 |  | 5.1629 |  | (4,932)
Bond - BRF SA BRFSBZ 4.35 |  | Al-Wafi Al-Takamol International for Foods Products |  | USD |  | 3rd Qtr. 2026 |  | USD (3) | 40,000 |  | 5.1629 |  | (2,306)
|  |  |  |  |  |  |  |  |  |  |  |  | (353,300)
| (1) | Corresponds to the effective portion of the hedge result accumulated in Other Comprehensive Income.
| (2) | Designated on August 1st, 2019.
| (3) | Designated on November 9, 2022.
| 24.4.3. | Commodities price risk
The Company uses commodities as production inputs and is exposed to commodities price risk arising from future purchases. The management of such risk is performed through physical inventories, future purchases at fixed price and through derivative financial instruments. 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 Company performs purchases at variable prices in future and spot markets and, to hedge such exposure, it holds derivative financial instruments in long position (buy) to fix these prices in advance. The financial instruments designated as cash flow hedges for the variable commodities price exposure on December 31, 2022 are set forth below:
Schedule of financial instruments for the commodities price exposure |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
Cash flow hedge - Derivative instruments |  | Hedged object |  | Index |  | Maturity |  | Quantity |  | Exercise price (1) |  | Fair value
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 1st Qtr. 2023 |  | 32,999 | ton |  | 441.42 |  | 13,379
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 2nd Qtr. 2023 |  | 20,000 | ton |  | 435.41 |  | 7,566
Collar - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 1st Qtr. 2023 |  | 35,999 | ton |  | 478.95 |  | 3,647
Collar - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 2nd Qtr. 2023 |  | 33,992 | ton |  | 495.63 |  | 1,172
Collar - buy |  | Corn purchase - floating price |  | Corn - CBOT |  | 1st Qtr. 2023 |  | 113,077 | ton |  | 256.32 |  | 3,643
Collar - buy |  | Corn purchase - floating price |  | Corn - CBOT |  | 2nd Qtr. 2023 |  | 67,986 | ton |  | 261.09 |  | 1,458
Corn future - buy |  | Corn purchase - floating price |  | Corn - B3 |  | 1st Qtr. 2023 |  | 18,009 | ton |  | 1,514.07 |  | 83
Corn future - buy |  | Corn purchase - floating price |  | Corn - B3 |  | 2nd Qtr. 2023 |  | 2,700 | ton |  | 1,550.00 |  | 2
Collar - buy |  | Corn purchase - floating price |  | Corn - B3 |  | 1st Qtr. 2023 |  | 79,326 | ton |  | 1,674.15 |  | (414)
Collar - buy |  | Corn purchase - floating price |  | Corn - B3 |  | 2nd Qtr. 2023 |  | 94,635 | ton |  | 1,650.76 |  | 229
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 1st Qtr. 2023 |  | 3,000 | ton |  | 1,353.20 |  | 928
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 2nd Qtr. 2023 |  | 5,000 | ton |  | 1,336.53 |  | 1,800
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 3rd Qtr. 2023 |  | 5,997 | ton |  | 1,328.23 |  | 1,428
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 4th Qtr. 2023 |  | 501 | ton |  | 1,360.69 |  | -
Collar - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 2nd Qtr. 2023 |  | 8,001 | ton |  | 1,410.96 |  | (1,451)
Collar - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 3rd Qtr. 2023 |  | 2,000 | ton |  | 1,410.85 |  | (253)
|  |  |  |  |  |  |  | 523,223 |  |  |  |  | 33,217
| (1) | Base price of each commodity in USD/ton, except for Corn – B3 denominated in R$/ton.
In certain cases, the Company performs futures purchases at fixed prices and, to hedge such exposure, it holds derivative financial instruments in short position (sell) to keep these prices at market value. The financial instruments designated as fair value hedges for the fixed commodities price exposure on December 31, 2022 are set forth below:
12.31.22
Fair value hedge - Derivative instruments |  | Hedged object |  | Index |  | Maturity |  | Quantity |  | Exercise price (1) |  | Fair value
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 2nd Qtr. 2023 |  | 80,660 | ton |  | 255.31 |  | (3,849)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 3rd Qtr. 2023 |  | 106,019 | ton |  | 244.26 |  | (1,376)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 4th Qtr. 2023 |  | 6,658 | ton |  | 247.27 |  | 226
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 1st Qtr. 2024 |  | 17,999 | ton |  | 245.66 |  | 209
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 2nd Qtr. 2024 |  | 3,999 | ton |  | 246.88 |  | 45
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 2nd Qtr. 2023 |  | 594 | ton |  | 1,583.55 |  | -
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 3rd Qtr. 2023 |  | 212,922 | ton |  | 1,474.01 |  | (1,618)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 4th Qtr. 2023 |  | 9,990 | ton |  | 1,520.03 |  | (94)
|  |  |  |  |  |  |  | 438,842 |  |  |  |  | (6,457)
| (1) | Base price of each commodity in USD/ton, except for Corn – B3 denominated in R$/ton.
12.31.22
Fair value hedge - Derivative instruments |  | Protection object |  | Assets |  | Liabilities |  | Maturity |  | Notional |  | Exercise price |  | Fair value
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 2nd Qtr. 2023 |  | USD | 18,372 |  | 5.8861 |  | 7,435
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 3rd Qtr. 2023 |  | USD | 11,984 |  | 5.6260 |  | 1,069
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 4th Qtr. 2023 |  | USD | 1,646 |  | 5.5859 |  | (40)
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 1st Qtr. 2024 |  | USD | 4,422 |  | 5.8015 |  | 428
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD |  | 2nd Qtr. 2024 |  | USD | 987 |  | 5.8548 |  | 84
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,976
24.5. Effects of hedge instruments on financial information The effects of the financial instruments for hedging exchange rate, commodities price and interest rates in the income (loss) for the year, in Other Comprehensive Income (Loss) and in the financial position are set forth below:
Schedule of gains and losses with hedge accounting instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) for the year |  |  |  |  |  |  |  |  |  |
12.31.22 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Net Sales |  |  |  |  |  |  |  | 54,047,327 |  | - |  | - |  | 54,047,327
Derivatives result |  |  |  | Operating Results |  | Cash flow |  | 202,655 |  | - |  | - |  | 202,655
Non-derivatives result |  |  |  | Operating Results |  | Cash flow |  | (444,954) |  | - |  | - |  | (444,954)
Net Revenue |  | 26 |  |  |  |  |  | 53,805,028 |  | - |  | - |  | 53,805,028
Cost of Sales |  |  |  |  |  |  |  | - |  | (45,235,052) |  | - |  | (45,235,052)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (437,324) |  | - |  | (437,324)
Cost of Sales |  |  |  |  |  |  |  | - |  | (45,672,376) |  | - |  | (45,672,376)
Interests on loans and borrowings |  |  |  |  |  |  |  | - |  | - |  | (1,570,190) |  | (1,570,190)
Interest Rate Derivatives result |  |  |  | Interest expenses |  | Fair value |  | - |  | - |  | (281,453) |  | (281,453)
Foreign Exchange variation on assets and liabilities |  |  |  |  |  |  |  | 474,052 |  | - |  | - |  | 474,052
Foreign Exchange Derivatives result |  |  |  | Financial Position |  | Not designated |  | (899,953) |  | - |  | - |  | (899,953)
Foreign Exchange Derivatives result |  |  |  | Loans in foreign currency |  | Fair value |  | (138,218) |  | - |  | - |  | (138,218)
Effects on Financial Result |  | 28 |  |  |  |  |  | (564,119) |  | - |  | (1,851,643) |  | (2,415,762)
Other Comprehensive Income |  |  |  |  |  |  |  |  |  |
12.31.22 |  |  |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | 33,711 |  | (60,348) |  | - |  | (26,637)
Non-derivative Instruments – current |  |  |  | Operating Results |  | Cash flow |  | (103,686) |  | - |  | - |  | (103,686)
Non-derivative Instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | 548,639 |  | - |  | - |  | 548,639
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | 87,929 |  | - |  | - |  | 87,929
Other Comprehensive Income (1) |  |  |  |  |  |  |  | 566,593 |  | (60,348) |  | - |  | 506,245
| (1) | All effects are presents gross of taxes.
Statement of financial position |  |  |  |  |  |  |  |  |  |
12.31.22 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Designated derivatives |  |  |  | Operating Results |  | Cash flow / Fair value |  | 46,651 |  | 26,760 |  | (197,118) |  | (123,707)
Not designated derivatives |  |  |  | Financial Position |  | Not designated |  | (2,312) |  | - |  | - |  | (2,312)
Asset / (Liability) net |  |  |  |  |  |  |  | 44,339 |  | 26,760 |  | (197,118) |  | (126,019)
Derivative Instruments - current (2) |  |  |  | Operating Results |  | Cash flow |  | 37,675 |  | 43,398 |  | - |  | 81,073
Non-derivative instruments – current |  |  |  | Operating Results |  | Cash flow |  | (548,639) |  | - |  | - |  | (548,639)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (353,300) |  | - |  | - |  | (353,300)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | (864,264) |  | 43,398 |  | - |  | (820,866)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (18,853) |  | - |  | (18,853)
Inventories |  | 7 |  |  |  |  |  | - |  | (18,853) |  | - |  | (18,853)
| (1) | All effects are presented gross of taxes.
| (2) | Includes R$4,127 related to the time value of the commodity options contracts.
Income (loss) for the year |  |  |  |  |  |  |  |  |  |
12.31.21 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Net Sales |  |  |  |  |  |  |  | 48,327,703 |  | - |  | - |  | 48,327,703
Derivatives result |  |  |  | Operating Results |  | Cash flow |  | 15,602 |  | - |  | - |  | 15,602
Net Revenue |  | 26 |  |  |  |  |  | 48,343,305 |  | - |  | - |  | 48,343,305
Cost of Sales |  |  |  |  |  |  |  | - |  | (37,858,788) |  | - |  | (37,858,788)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (318,821) |  | - |  | (318,821)
Cost of Sales |  |  |  |  |  |  |  | - |  | (38,177,609) |  | - |  | (38,177,609)
Interests on loans and borrowings |  |  |  |  |  |  |  | - |  | - |  | (1,681,078) |  | (1,681,078)
Interest Rate Derivatives result |  |  |  | Interest expenses |  | Fair value |  | - |  | - |  | (33,084) |  | (33,084)
Foreign Exchange variation on assets and liabilities |  |  |  |  |  |  |  | (408,269) |  | - |  | - |  | (408,269)
Foreign Exchange Derivatives result |  |  |  | Financial Position |  | Not designated |  | 157,573 |  | - |  | - |  | 157,573
Effects on Financial Result |  | 28 |  |  |  |  |  | (250,696) |  | - |  | (1,714,162) |  | (1,964,858)
Other Comprehensive Income |  |  |  |  |  |  |  |  |  |
12.31.21 |  |  |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | (43,978) |  | (67,560) |  | - |  | (111,538)
Non-derivative Instruments – current |  |  |  | Operating Results |  | Cash flow |  | (444,953) |  | - |  | - |  | (444,953)
Non-derivative Instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | 334,577 |  | - |  | - |  | 334,577
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (96,555) |  | - |  | - |  | (96,555)
Other Comprehensive Income |  |  |  |  |  |  |  | (250,909) |  | (67,560) |  | - |  | (318,469)
Statement of financial position |  |  |  |  |  |  |  |  |  |
12.31.21 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Designated derivatives |  |  |  | Operating Results |  | Cash flow / Fair value |  | (10,342) |  | 47,620 |  | (30,108) |  | 7,170
Not designated derivatives |  |  |  | Financial Position |  | Not designated |  | (231,119) |  | - |  | - |  | (231,119)
Asset / (Liability) net |  |  |  |  |  |  |  | (241,461) |  | 47,620 |  | (30,108) |  | (223,949)
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | 3,964 |  | 103,746 |  | - |  | 107,710
Non-derivative instruments – current |  |  |  | Operating Results |  | Cash flow |  | (444,953) |  | - |  | - |  | (444,953)
Non-derivative instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | (548,640) |  | - |  | - |  | (548,640)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (441,229) |  | - |  | - |  | (441,229)
Other Comprehensive Income |  |  |  |  |  |  |  | (1,430,858) |  | 103,746 |  | - |  | (1,327,112)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | 531,732 |  | - |  | 531,732
Inventories |  | 7 |  |  |  |  |  | - |  | 531,732 |  | - |  | 531,732
On December 16, 2021, the cash flow hedge relations presented below was discontinued because the hedging instruments was non-derivative financial instruments (loans) and no longer met the Company’s strategies and objectives.
Schedule of hedging instruments non-derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
12.31.22
Cash flow hedge - Non-derivative instruments |  | Hedged object |  | Liability |  | Maturity |  | Notional |  | Designation rate |  | Rate (1) |  | Balance (2)
Bond BRF SA BRFSBZ 3.95 |  | USD Exports |  | USD |  | 2nd Qtr. 2023 |  | USD | 150,000 |  | 2.0387 |  | 5.6963 |  | (548,639)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | (548,639)
| (2) | Average discontinuance rates.
| (3) | Effective portion of the accumulated foreign exchange variations on the designated loans.
The amount above will be maintained in Other Comprehensive Income (Loss) until its maturity, according to the previous designation and effectiveness. During the year ended December 31, 2022, the loan Bond BRF SA BRFSBZ 5 7/8, previously designated as hedging instrument for exports, was settled and the amount of R$(444,954) previously accumulated in Other Comprehensive Income (Loss) was reclassified to the statement of income (loss) within Net Sales. Summarized financial position of derivative financial instruments:
Summarized financial position of derivative financial instruments |  |  |
| 12.31.22 |  | 12.31.21
Assets |  |  |
Designated as hedge accounting |  |  |
Currency derivatives | 64,202 |  | 27,617
Commodities derivatives | 53,490 |  | 105,228
Interest rate derivatives | 9,517 |  | 10,457
Not designated as hedge accounting |  |  |
Currency derivatives | 3,939 |  | 2,053
| 131,148 |  | 145,355
Current assets | 120,865 |  | 134,551
Non-current assets | 10,283 |  | 10,804
Liabilities |  |  |
Designated as hedge accounting |  |  |
Currency derivatives | (17,551) |  | (37,959)
Commodities derivatives | (26,730) |  | (57,608)
Interest rate derivatives | (206,635) |  | (40,565)
Not designated as hedge accounting |  |  |
Currency derivatives | (6,251) |  | (233,172)
| (257,167) |  | (369,304)
Current liabilities | (82,468) |  | (327,443)
Non-current liabilities | (174,699) |  | (41,861)
24.6. Sensitivity analysis Management believes 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, 2022, which has been described in the items above. The estimated values may differ significantly to numbers and results that will be effectively registered by the Company. Positive values indicate gains and negative values indicate losses.
Schedule of quantitative and qualitative information |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Scenario
Exchange rate - Balance |  | Base |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.2177 |  | 2.6089 |  | 3.9133 |  | 4.6959 |  | 5.7395 |  | 6.5221 |  | 7.8266
Monetary Assets and Liabilities |  |  |  | 2,088,710 |  | 1,044,355 |  | 417,742 |  | (417,742) |  | (1,044,355) |  | (2,088,710)
Derivative Instruments - Not designated |  |  |  | (1,720,265) |  | (860,133) |  | (344,053) |  | 344,053 |  | 860,133 |  | 1,720,265
Net effect |  |  |  | 368,445 |  | 184,222 |  | 73,689 |  | (73,689) |  | (184,222) |  | (368,445)
EUR |  | 5.5694 |  | 2.7847 |  | 4.1771 |  | 5.0125 |  | 6.1263 |  | 6.9618 |  | 8.3541
Monetary Assets and Liabilities |  |  |  | 266,776 |  | 133,388 |  | 53,355 |  | (53,355) |  | (133,388) |  | (266,776)
Derivative Instruments - Not designated |  |  |  | (245,054) |  | (122,527) |  | (49,011) |  | 49,011 |  | 122,527 |  | 245,054
Net effect |  |  |  | 21,722 |  | 10,861 |  | 4,344 |  | (4,344) |  | (10,861) |  | (21,722)
JPY |  | 0.0396 |  | 0.0198 |  | 0.0297 |  | 0.0356 |  | 0.0435 |  | 0.0495 |  | 0.0594
Monetary Assets and Liabilities |  |  |  | 1,634 |  | 817 |  | 327 |  | (327) |  | (817) |  | (1,634)
Net effect |  |  |  | 1,634 |  | 817 |  | 327 |  | (327) |  | (817) |  | (1,634)
TRY |  | 0.2788 |  | 0.1394 |  | 0.2091 |  | 0.2509 |  | 0.3067 |  | 0.3485 |  | 0.4182
Monetary Assets and Liabilities |  |  |  | (211,822) |  | (105,911) |  | (42,364) |  | 42,364 |  | 105,911 |  | 211,822
Derivative Instruments - Not designated |  |  |  | 104,354 |  | 52,177 |  | 20,871 |  | (20,871) |  | (52,177) |  | (104,354)
Net effect |  |  |  | (107,468) |  | (53,734) |  | (21,493) |  | 21,493 |  | 53,734 |  | 107,468
AOA |  | 0.0104 |  | 0.0052 |  | 0.0078 |  | 0.0093 |  | 0.0114 |  | 0.0130 |  | 0.0156
Monetary Assets and Liabilities |  |  |  | (26,862) |  | (13,431) |  | (5,372) |  | 5,372 |  | 13,431 |  | 26,862
Net effect |  |  |  | (26,862) |  | (13,431) |  | (5,372) |  | 5,372 |  | 13,431 |  | 26,862
CLP |  | 0.0061 |  | 0.0031 |  | 0.0046 |  | 0.0055 |  | 0.0067 |  | 0.0077 |  | 0.0092
Monetary Assets and Liabilities |  |  |  | (128,060) |  | (64,030) |  | (25,612) |  | 25,612 |  | 64,030 |  | 128,060
Net effect |  |  |  | (128,060) |  | (64,030) |  | (25,612) |  | 25,612 |  | 64,030 |  | 128,060
|  | Scenario
Exchange rate - Operating results |  | Base |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.2177 |  | 2.6089 |  | 3.9133 |  | 4.6959 |  | 5.7395 |  | 6.5221 |  | 7.8266
Revenue in USD |  |  |  | (1,293,990) |  | (646,995) |  | (258,798) |  | 258,798 |  | 646,995 |  | 1,293,990
NDF |  |  |  | 772,220 |  | 386,110 |  | 154,444 |  | (154,444) |  | (386,110) |  | (772,220)
Collar |  |  |  | 511,095 |  | 250,210 |  | 93,679 |  | (34,277) |  | (179,827) |  | (440,712)
Net effect |  |  |  | (10,675) |  | (10,675) |  | (10,675) |  | 70,077 |  | 81,058 |  | 81,058
|  | Scenario
Exchange rate - Operating results |  | Base (1) |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.2177 |  | 2.6089 |  | 3.9133 |  | 4.6959 |  | 5.7395 |  | 6.5221 |  | 7.8266
Cost of Sales |  |  |  | (97,601) |  | (48,801) |  | (19,520) |  | 19,520 |  | 48,801 |  | 97,601
NDF |  |  |  | 97,601 |  | 48,801 |  | 19,520 |  | (19,520) |  | (48,801) |  | (97,601)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
Soybean Meal - CBOT |  | 514 |  | 257 |  | 385 |  | 462 |  | 565 |  | 642 |  | 771
Cost of Sales |  |  |  | 31,589 |  | 15,795 |  | 6,318 |  | (6,318) |  | (15,795) |  | (31,589)
Collar |  |  |  | (13,454) |  | (4,519) |  | (576) |  | 1,860 |  | 7,243 |  | 16,214
NDF |  |  |  | (13,648) |  | (6,824) |  | (2,730) |  | 2,730 |  | 6,824 |  | 13,648
Net effect |  |  |  | 4,487 |  | 4,452 |  | 3,012 |  | (1,728) |  | (1,728) |  | (1,727)
Soybean Oil - CBOT |  | 1,397 |  | 698 |  | 1,048 |  | 1,257 |  | 1,537 |  | 1,746 |  | 2,095
Cost of Sales |  |  |  | 17,112 |  | 8,556 |  | 3,422 |  | (3,422) |  | (8,556) |  | (17,112)
Collar |  |  |  | (6,802) |  | (3,296) |  | (1,174) |  | 1,168 |  | 3,311 |  | 6,817
NDF |  |  |  | (10,100) |  | (5,050) |  | (2,020) |  | 2,020 |  | 5,050 |  | 10,100
Net effect |  |  |  | 210 |  | 210 |  | 228 |  | (234) |  | (195) |  | (195)
Corn - CBOT |  | 260 |  | 130 |  | 195 |  | 234 |  | 285 |  | 324 |  | 389
Cost of Sales |  |  |  | (4,447) |  | (2,223) |  | (889) |  | 889 |  | 2,223 |  | 4,447
Collar |  |  |  | (142,169) |  | (62,790) |  | (15,926) |  | 10,338 |  | 57,544 |  | 136,924
NDF |  |  |  | 27,258 |  | 13,629 |  | 5,452 |  | (5,452) |  | (13,629) |  | (27,258)
Net effect |  |  |  | (119,358) |  | (51,384) |  | (11,363) |  | 5,775 |  | 46,138 |  | 114,113
Corn - B3 |  | 1,517 |  | 759 |  | 1,138 |  | 1,366 |  | 1,669 |  | 1,897 |  | 2,276
Cost of Sales |  |  |  | (21,876) |  | (10,938) |  | (4,375) |  | 4,375 |  | 10,938 |  | 21,876
Collar |  |  |  | (122,349) |  | (55,057) |  | (14,682) |  | 7,402 |  | 47,444 |  | 114,736
Future |  |  |  | 151,686 |  | 75,843 |  | 30,337 |  | (30,337) |  | (75,843) |  | (151,686)
Net effect |  |  |  | 7,461 |  | 9,848 |  | 11,280 |  | (18,560) |  | (17,461) |  | (15,074)
| (1) | Base price of each commodity in USD/ton, except for Corn – B3 denominated in R$/ton.
24.7. Financial instruments by category
Schedule of financial instruments by category |  |  |  |  |  |  |
| 12.31.22
| Amortized cost |  | Fair value through other comprehensive income | Fair value through profit and loss |  | Total
|  | Equity instruments |  |
Assets |  |  |  |  |  |  |
Cash and bank | 1,865,077 |  | - |  | - |  | 1,865,077
Cash equivalents | - |  | - |  | 6,265,852 |  | 6,265,852
Marketable securities | 379,145 |  | 11,752 |  | 433,878 |  | 824,775
Restricted cash | 89,717 |  | - |  | - |  | 89,717
Trade accounts receivable | 3,918,570 |  | - |  | 274,493 |  | 4,193,063
Other receivables | 38,443 |  | - |  | - |  | 38,443
Derivatives not designated | - |  | - |  | 3,939 |  | 3,939
Derivatives designated as hedge accounting (1) | - |  | - |  | 127,209 |  | 127,209
Liabilities |  |  |  |  |  |  |
Trade accounts payable | (12,743,087) |  | - |  | - |  | (12,743,087)
Supply chain finance | (1,393,137) |  | - |  | - |  | (1,393,137)
Loans and borrowings (2) | (16,055,704) |  | - |  | (7,461,296) |  | (23,517,000)
Derivatives not designated | - |  | - |  | (6,251) |  | (6,251)
Derivatives designated as hedge accounting (1) | - |  | - |  | (250,916) |  | (250,916)
| (23,900,976) |  | 11,752 |  | (613,092) |  | (24,502,316)
| (1) | All derivatives are classified at fair value through profit and loss. Those designated as hedge accounting instruments have their gains and losses also affecting Equity and Inventories.
| (2) | The part of the loans and borrowings that is object in a fair value hedge is classified as Fair value through profit and loss. The rest of the loans and borrowings balance is classified as amortized cost and those designated as cash flow or net investment hedge accounting instruments have their gains and losses also affecting Equity.
| 12.31.21
| Amortized cost |  | Fair value through other comprehensive income | Fair value through profit and loss |  | Total
|  | Equity instruments |  |
Assets |  |  |  |  |  |  |
Cash and bank | 2,193,508 |  | - |  | - |  | 2,193,508
Cash equivalents | - |  | - |  | 5,335,312 |  | 5,335,312
Marketable securities | 418,637 |  | 13,338 |  | 362,293 |  | 794,268
Restricted cash | 24,964 |  | - |  | - |  | 24,964
Trade accounts receivable | 3,709,399 |  | - |  | 335,566 |  | 4,044,965
Other receivables | 97,169 |  | - |  | - |  | 97,169
Derivatives not designated | - |  | - |  | 2,053 |  | 2,053
Derivatives designated as hedge accounting | - |  | - |  | 143,302 |  | 143,302
Liabilities |  |  |  |  |  |  |
Trade accounts payable | (11,714,624) |  | - |  | - |  | (11,714,624)
Supply chain finance | (2,237,975) |  | - |  | - |  | (2,237,975)
Loans and borrowings | (22,087,599) |  | - |  | (3,368,431) |  | (25,456,030)
Derivatives not designated | - |  | - |  | (233,172) |  | (233,172)
Derivatives designated as hedge accounting | - |  | - |  | (136,132) |  | (136,132)
| (29,596,521) |  | 13,338 |  | 2,440,791 |  | (27,142,392)
24.8. 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 does not have financial instruments in this category.
The table below presents the overall classification of financial instruments accounted at fair value by measurement hierarchy. For the year ended December 31, 2022, there were no changes among the 3 levels of hierarchy.
Schedule of classification of financial assets and liabilities according to the valuation hierarchy |  |  |  |  |  |  |  |  |  |  |
| 12.31.22 |  | 12.31.21
| Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2 |  | Total
Financial Assets |  |  |  |  |  |  |  |  |  |  |
Fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |  |
Stocks | 11,752 |  | - |  | 11,752 |  | 13,338 |  | - |  | 13,338
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |
Savings account and overnight | 12,720 |  | - |  | 12,720 |  | 701,386 |  | - |  | 701,386
Term deposits | 2,495,438 |  | - |  | 2,495,438 |  | 179,071 |  | - |  | 179,071
Bank deposit certificates | - |  | 3,754,202 |  | 3,754,202 |  | - |  | 4,451,214 |  | 4,451,214
Financial treasury bills | 364,543 |  | - |  | 364,543 |  | 324,771 |  | - |  | 324,771
Investment funds | 19,018 |  | - |  | 19,018 |  | 35,718 |  | - |  | 35,718
Trade accounts receivable | - |  | 274,493 |  | 274,493 |  | - |  | 335,566 |  | 335,566
Derivatives | - |  | 131,148 |  | 131,148 |  | - |  | 145,355 |  | 145,355
Other titles | 53,809 |  | - |  | 53,809 |  | 5,445 |  | - |  | 5,445
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |
Derivatives | - |  | (257,167) |  | (257,167) |  | - |  | (369,304) |  | (369,304)
Loans and borrowings | - |  | (7,461,296) |  | (7,461,296) |  | - |  | (3,368,431) |  | (3,368,431)
| 2,957,280 |  | (3,558,620) |  | (601,340) |  | 1,259,729 |  | 1,194,400 |  | 2,454,129
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 on prices observed in active markets, level 1 of the fair value hierarchy, while the debentures are based on level 2 and are measured by discounted cash flows.
Schedule of comparison between book value and fair value of financial instruments |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | 12.31.22 |  | 12.31.21
|  | Currency |  | Maturity |  | Book value |  | Fair value |  | Book value |  | Fair value
BRF S.A. |  |  |  |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ 4 3/4 |  | USD |  | 2024 |  | (1,525,727) |  | (1,513,221) |  | (1,653,847) |  | (1,726,951)
BRF SA BRFSBZ 3.95 |  | USD |  | 2023 |  | (1,185,479) |  | (1,209,990) |  | (1,303,821) |  | (1,337,246)
BRF SA BRFSBZ 4 7/8 |  | USD |  | 2030 |  | (3,119,390) |  | (2,602,599) |  | (3,914,280) |  | (3,993,593)
BRF SA BRFSBZ 5 3/4 |  | USD |  | 2050 |  | (3,463,081) |  | (2,503,033) |  | (4,423,083) |  | (4,521,103)
BRF SA BRFSBZ 5 7/8 |  | USD |  | 2022 |  | - |  | - |  | (396,802) |  | (409,454)
BRF SA BRFSBZ 2 3/4 |  | EUR |  | 2022 |  | - |  | - |  | (1,072,454) |  | (1,076,964)
Debenture - 1st Issue |  | BRL |  | 2032 |  | (2,571,080) |  | (2,521,309) |  | (823,946) |  | (821,444)
Debenture - 2nd Issue |  | BRL |  | 2030 |  | (2,355,427) |  | (2,319,296) |  | (2,351,363) |  | (2,382,298)
Debenture - 3rd Issue |  | BRL |  | 2031 |  | (1,013,639) |  | (877,103) |  | (1,034,706) |  | (915,353)
BRF GmbH |  |  |  |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ 4.35 |  | USD |  | 2026 |  | (2,608,613) |  | (2,367,075) |  | (2,779,725) |  | (2,854,701)
|  |  |  |  |  | (17,842,436) |  | (15,913,626) |  | (19,754,027) |  | (20,039,107)

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