CVM Resolution No. 128 of June 3, 2022

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
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CVM RESOLUTION NO. 128, OF JUNE 3, 2022
Approves the Consolidation of Technical Interpretation ICPC 17 of the Accounting Pronouncements Committee – CPC, which deals with concession contracts: disclosure.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION OF BRAZIL - CVM makes public that the Board, in a meeting held on May 4, 2022, based on §§ 3 and 5 of art. 177 of Law No. 6,404, of December 15, 1976, combined with items II and IV of § 1 of art. 22 of Law No. 6,385, of December 7, 1976, as well as arts. 5 and 14 of Decree No. 10,139, of November 28, 2019, APPROVED the following Resolution:

Art. 1. It makes mandatory for open capital companies the Technical Interpretation ICPC 17, which deals with concession contracts: disclosure, issued by the Accounting Pronouncements Committee - CPC, as consolidated in Annex “A” to this Resolution.

Art. 2. CVM Deliberation No. 677, of December 13, 2011, is revoked, from the effective date of this Resolution.

Art. 3. This Resolution enters into force on July 1, 2022.

Signed electronically by
Marcelo Barbosa
President

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ANNEX “A”

ACCOUNTING PRONOUNCEMENTS COMMITTEE
TECHNICAL INTERPRETATION ICPC 17
CONCESSION CONTRACTS: DISCLOSURE
Correlation with International Financial Reporting Standards – SIC 29 (BV2011 BB)*

Index Item

REFERENCES
TOPIC 1 – 5
CONSENSUS 6 – 7

*BV 2011 BB refers to the version of IFRSs, with validity required for annual periods beginning on January 1 of 2011, from the book issued by the IASB "IFRS Consolidated without early application" (Blue Book).

References

CPC 26 - Presentation of Financial Statements
CPC 27 – Property, Plant and Equipment
CPC 06 – Leases
CPC 25 – Provisions, Contingent Liabilities and Contingent Assets
CPC 04 – Intangible Assets
ICPC 01 – Concession Contracts

Topic

An entity (concessionaire) may enter into a contractual agreement with another entity
(grantor) to provide services that allow the public access to various economic and social facilities. The grantor may be a public sector entity or a private sector entity linked to a government body. Examples of public concession services comprise water treatment networks and the supply of essential public services, highways, vehicle parking lots, tunnels, bridges, airports and telecommunications networks. Examples of contractual agreements that are not characterized as public concession services comprise an entity outsourcing the operation of its internal services (examples:
employee cafeteria, building maintenance, information technology functions and accounting services).
The public concession service generally involves the grantor granting to the concessionaire
for the duration of the concession:
(a) the right to provide services that allow the public access to various economic and social facilities;

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and (b) in some cases, the right to use specified tangible assets, intangible assets or financial assets; in consideration of the concessionaire:
(c) assuming the commitment to provide services according to determined terms and conditions of the contract, during the concession period; and (d) when applicable, assuming the commitment to revert, at the end of the concession period, the rights received at the beginning of the concession period and/or acquired during this period.

A common characteristic to all contractual agreements involving public concessions is the
fact that the concessionaire simultaneously receives a right and an obligation to provide public services.
The topic of this Interpretation concerns what type of information must be provided in the notes
to the financial statements accompanying the financial statements of the concessionaire and the grantor.
Certain aspects and disclosures related to the concession of some public services are already
properly addressed in the Technical Pronouncements of the CPC (for example, CPC 27 for acquisitions of property, plant and equipment items, CPC 06 applied to leased assets and CPC 04 applied to acquisitions of intangible assets). However, a contractual agreement for the concession of public services may involve executory contracts that are not governed by the Technical Pronouncements of the CPC, unless they are onerous contracts, in which case CPC 25 – Provisions, Contingent Liabilities and Contingent Assets must be applied. Thus, this Interpretation deals with additional disclosures for contractual agreements for the concession of public services.

Consensus
6. All aspects of the concession contract must be considered to determine the
disclosures appropriate in the notes to the financial statements. The concessionaire and the grantor must disclose the following at the end of each reporting period:
(a) description of the contractual agreement;
(b) significant terms of the contract that may affect the amount, timing and certainty of future cash flows (for example, the concession period, dates of price adjustments and bases on which the adjustment or renegotiation will be determined); (c) nature and extent (for example, quantity, timing or amount, as applicable) of:
(i) rights to use specified assets;
(ii) obligation to provide services or rights to receive services; (iii) obligations to acquire or construct concession infrastructure items; (iv) obligation to deliver or right to receive specified assets at the end of the concession term; (v) option to renew or terminate; and (vi) other rights and obligations (for example, periodic major maintenance); (d) changes in the contract occurring during the period; and (e) how the concession contract was classified.

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6A. The concessionaire must disclose the total revenue and profits or losses recognized in the period for the provision of construction services in exchange for a financial asset or an intangible asset.

The disclosures required in accordance with item 6 of this Interpretation must be made for each
individual concession contract or for each class of concession contracts. A class is the grouping of concession contracts involving services of a similar nature (for example, toll collection, telecommunications services, water treatment).

CVM Resolution No. 128 of June 3, 2022

Lineage: In force