ANNEX A—SUMMARY OF CERTAIN DIFFERENCES BETWEEN BRAZILIAN GAAP AND U.S. GAAP (UNAUDITED) General Information
There are certain differences between Accounting Practices Adopted in Brazil and U.S. GAAP,
which are relevant to UOL’s financial information presented in this Annual Report. The followingpresentation is a summary of some of the significant aspects of those differences; but this summaryshould not be construed to be exhaustive. Further, investors should also consider the following relevantaspects with respect to this summary:
• Future differences between Accounting Practices Adopted in Brazil and U.S. GAAP resulting
from changes in accounting standards or from transactions or events that may occur in thefuture have not been taken into account in this summary and the Company have not attemptedto identify them.
• Ongoing projects of the regulatory bodies that promulgate Accounting Practices Adopted in
Brazil and U.S. GAAP can affect future comparisons between Accounting Practices Adopted inBrazil and U.S. GAAP such as this summary.
• This summary does not purport to be complete and is subject and qualified in its entirety by
reference to the respective pronouncements of the Brazilian and United States accountingprofessional bodies.
• The U.S. accounting principles referred to herein do not include any additional accounting
adjustments or disclosure that the SEC may require.
• In making an investment decision, investors must rely upon their own examination of the
business, the terms of the offering and the financial information. Potential investors shouldconsult their own professional advisors for an understanding of the differences betweenAccounting Practices Adopted in Brazil and U.S. GAAP and how those differences might impactthe financial information contained herein. Accounting Practices Adopted in Brazil
Accounting Practices Adopted in Brazil are established by Brazilian corporate law and
complemented by interpretation statements issued by the Instituto dos Auditores Independentes do Brasil(Brazilian Institute of Independent Auditors or IBRACON), the Brazilian accounting professional body. Those accounting principles and standards, in the case of companies listed with the Brazilian SecuritiesCommission (‘‘CVM’’), are complemented by certain additional rules issued by the CVM. AccountingPractices Adopted in Brazil differ in certain material aspects from U.S. GAAP. Unlike U.S. GAAP,under Accounting Practices Adopted in Brazil there are no specific pronouncements for certain matterssuch as:
• accounting and reporting for research and development costs; and
The level of disclosure in the notes to the financial statements may also differ significantly as
Accounting Practices Adopted in Brazil generally require less information to be included in the notesthan U.S. GAAP. Forms of Presentation—Consolidation
Under Accounting Practices Adopted in Brazil, financial statements may be presented on a stand
alone basis with subsidiaries and joint ventures accounted for on an equity basis, on a consolidatedbasis (Consolidated) whereby subsidiaries are fully consolidated and joint ventures are accounted for ona proportional consolidation basis, and on a consolidated holding (Consolidated Holding) basis wherebysubsidiaries are fully consolidated and joint ventures are accounted for on an equity basis. Consolidation of subsidiaries for publicly traded companies is generally required under AccountingPractices Adopted in Brazil. For the purposes of such consolidation, controlling interest means theright, whether by shareholders’ agreement or otherwise to:
• appoint or remove the majority of directors or executive officers;
• exercise operational control (for example, companies with a common management or sharing a
• exercise corporate control (including indirect participation—shares held by related parties and
Under U.S. GAAP, the basic rule is that when a company has a controlling interest (either through
a majority voting interest, or through the existence of other control factors) in another company, suchcompany’s financial statements should be consolidated with those of the parent. Consolidation is notrequired where control is temporary or does not rest with the majority owner. The minoritystockholders’ share of the subsidiaries’ earnings is deducted from (or losses added to) the consolidatedresults of operations. Losses applicable to the minority interest which exceed its interest in consolidatedstockholders’ equity should be applied to the majority interest. Equity investments in non-controlledcompanies are usually accounted for following the equity method of accounting. Proportionalconsolidation generally is not allowed under U.S. GAAP. Business Combinations and Purchase Accounting and Goodwill
Under Accounting Practices Adopted in Brazil, accounting standards do not specifically address
business combinations and purchase accounting. The purchase method is applied based on book values. Goodwill or negative goodwill on the acquisition of a company is computed as the difference betweenthe cost of acquisition and its underlying book value. The excess of cost over the net book value of anacquired company is recorded as goodwill under one of the following reasons: step-up basis of theassets; future profitability; and other reasons. Such goodwill should be amortised as follows dependingon its nature:
• Step-up basis of the assets: Goodwill or negative goodwill should be amortised proportionally to
the corresponding asset realisation in the acquiree;
• Future profitability: Goodwill or negative goodwill should be amortised during the time period
that expected results are achieved. In this case, the amortisation period should not exceed tenyears;
• Other reasons: Goodwill or negative goodwill should be expensed immediately.
For tax purposes, the minimum goodwill amortisation period accepted is five years, regardless of
Under U.S. GAAP all business combinations, except those involving entities under common
control, are accounted for using the purchase method. The combination of entities under commoncontrol is accounted for in a manner similar to a pooling of interest. Under the pooling of interestmethod, the recorded assets and liabilities of the separate enterprises generally become the recorded
assets and liabilities of the combined enterprise. Additionally, the combined enterprise records ascapital, the share capital and capital in excess of par or stated value of outstanding stock of theseparate enterprises. Similarly, retained earnings or deficits of the separate enterprises are combinedand recognised as retained earnings or deficits of the combined enterprise. Any assets or liabilitiesexchanged to effect the transfer are accounted for as a capital dividend to, or capital contribution by,the transferor. Under the pooling of interest method, the financial statements of the combinedenterprise for periods prior to the combination are restated to present the previously separateenterprises as if they had always been combined.
The purchase method is applicable for a business combination in which one company acquires an
unrelated company. Under U.S. GAAP, the acquiring company records as its cost, the assets acquiredless liabilities assumed. The acquired company’s assets and liabilities are adjusted to give effect to theirfair value. After the assets (including certain intangibles) and liabilities of the acquired companies areadjusted to their fair values at the acquisition date, if the purchase price exceeds the amount of suchfair value, the excess is recorded as goodwill (intangible asset) pursuant to detailed guidelines by theacquiring company and goodwill and other intangible assets with indefinite lives are not amortised. Theamount of goodwill is evaluated for impairment at least annually, and in the case of impairment itsrecorded value is adjusted accordingly. If any balance remains, after noncurrent assets are reduced tozero, such remaining balance is recognised as an extraordinary gain in the statement of operations. Under the purchase method, the financial statements of the acquirings company for periods prior tothe acquisition are not restated. U.S. GAAP require the presentation of pro forma results of operationsfor the current and comparative periods of business combinations accounted for as purchases. Cash and Cash Equivalents
Under Accounting Practices Adopted in Brazil, cash equivalents are less defined than under U.S.
GAAP. U.S. GAAP defines cash equivalents as short-term highly liquid investments that are bothreadily convertible to known amounts of cash and so near their maturity that they present insignificantrisk of changes in value because of changes in interest rates. Generally, only investments with originalmaturities of 90 days or less qualify as cash and cash equivalents for U.S. GAAP purposes. Investments in Debt and Equity Securities
Under Accounting Practices Adopted in Brazil, marketable debt and equity securities are generally
stated at the lower of monetarily adjusted (up to December 31, 1995) cost or market value and reflectrealised gains and losses in income.
Under U.S. GAAP, for companies in industries not having specialised accounting practices, the
accounting and reporting for investments in equity securities that have readily determinable fair valuesand for all investments in debt securities is as follows:
• Companies classify debt securities that the company has the positive intent and ability to hold to
maturity as ‘‘held-to-maturity’’ securities and report them at amortised cost;
• Companies classify debt and equity securities they hold principally for the purpose of selling
them in the short-term as ‘‘trading securities’’ and report them at fair market value, includingunrealised gains and losses in income; and
• Companies classify debt and equity securities that they have not classified either as ‘‘held-to-
maturity’’ or ‘‘trading securities’’ as securities available-for-sale and report them at fair value,excluding unrealised gains and losses from earnings and reporting them in a separate componentof shareholders’ equity until realised. Leasing
For U.S. GAAP purposes, capital leases are recorded as fixed assets along with the related lease
obligations. For fixed assets, the current annual depreciation is calculated using the straight-line methodbased on the expected useful life of the assets, while the related lease obligations are recorded at netpresent value of future lease payments. Under Accounting Practices Adopted in Brazil, such contractsare typically recorded as operating leases. Capitalized Interest
Under Accounting Practices Adopted in Brazil interest charges and monetary and foreign exchange
variation from financing linked to construction in progress are capitalized to the balance of the assetsand credited to interest expense and monetary and foreign exchange variation. Under U.S. GAAP,interest incurred on borrowings is capitalized as part of the cost of certain assets to the extent thatborrowings do not exceed construction in progress. The credit is recorded as a reduction of interestexpense. The amount of interest capitalized excludes monetary gains on local currency borrowings andforeign exchange gains and losses on foreign currency borrowings. Barter Transaction
Under Accounting Practices Adopted in Brazil, revenues arising from barter transactions are
accounted as services are rendered and related costs are recognized as the company uses the contractedservices. For U.S. GAAP purposes, revenue and expense are recognized at fair value from anadvertising barter transaction only if the fair value of the advertising rendered in the transaction isdeterminable based on the entity’s own historical practice of receiving cash, marketable securities, orother consideration that is readily convertible to a known amount of cash for similar advertising frombuyers unrelated to the counterparty in the barter transaction. An exchange between the parties to abarter transaction of offsetting monetary consideration, such as a swap of checks for equal amounts,does not evidence the fair value of the transaction. If the fair value of the advertising rendered in thebarter transaction is not determinable, the barter transaction should be recorded based on the carryingamount of the advertising rendered, which likely will be zero. Income Taxes
Under Accounting Practices Adopted in Brazil, UOL records income taxes pursuant to a method
which is similar to U.S. GAAP, but its practical application may lead to different results under certaincircumstances. The criteria for recognition of the tax benefit of tax loss carryforwards under AccountingPractices Adopted in Brazil and CVM rules limit such recognition to a maximum of ten years. Also,under Accounting Practices Adopted in Brazil, deferred tax effects are based on statutory rates,including those established by Provisional Measures issued by the Brazilian Government.
Under U.S. GAAP, companies use the liability method to calculate the income tax provision,
pursuant to which companies recognise deferred tax assets or liabilities with a corresponding charge orcredit to income for differences between the financial and tax basis of assets and liabilities at each year/period-end. Under U.S. GAAP, companies operating in highly inflationary environments do not recorddeferred taxes for differences relating to certain assets and liabilities that they remeasure into U.S. dollars at historical exchange rates and that result from changes in exchange rates or indexing toinflation in local currency for tax purposes. Companies recognise net operating loss carryforwardsarising from tax losses as assets and establish valuation allowances to reflect the amount that morelikely than not will be recovered. Deferred tax effects are based on the enacted tax rates that will be ineffect when the temporary differences reverse. There may be differences in timing with respect to therecognition of the effects of changes in tax rates. In addition, U.S. GAAP requires that any provisional
measures, which are temporary differences used by the Brazilian Government to determine changes intax rates, are not considered to be enacted law. Segment Information
Under Accounting Practices Adopted in Brazil, there is no requirement for financial reporting of
Under U.S. GAAP, publicly held companies report both financial and descriptive information
about their reportable operating segments. Operating segments are defined as those about whichseparate financial information is available and is regularly evaluated by the chief decision maker. Segment information is given about any operating segment that accounts for 10% or more of allsegment revenue, results of operating activities, or total assets. Generally, companies report financialinformation on the basis used internally for evaluating segment performance. Financial information tobe disclosed includes segment profit or loss, certain specific revenue and expense items and segmentassets as well as reconciliation of total segment revenues, profit or loss and assets to the correspondingamounts in the financial statements. Related Parties
Accounting Practices Adopted in Brazil generally defines related parties in a more limited manner
and requires fewer disclosures than U.S. standards. As a result, many of the disclosures required in theUnited States are not required in Brazil. Derivative Instruments
Under Accounting Practices Adopted in Brazil, there are no defined accounting practices to
address the valuation of derivative financial instruments. Under U.S. GAAP, a company recognizes allderivatives as either assets or liabilities in the statement of financial position and measures thoseinstruments at fair value. If certain conditions are met, a derivative may be specifically designated as:
A hedge of the exposure to changes in the fair value of a recognized asset or liability or anunrecognized firm commitment, that are attributable to a particular risk (referred to as a fairvalue hedge);
A hedge of the exposure to the variable cash flows of a recognized asset or liability, or of aforecasted transaction, that is attributable to a particular risk (referred to as a cash flowhedge); or
A hedge of the foreign currency exposure of (1) an unrecognized firm commitment (a foreigncurrency fair value hedge), (2) an available for sale security (a foreign currency fair valuehedge), (3) a forecasted transaction (a foreign currency cash flow hedge), or (4) a netinvestment in a foreign operation.
The accounting for changes in the fair value of a derivative depends on the intended use of thederivative and the resulting designation as a qualifying hedge. Derivatives that are not designated aspart of a hedging relationship must be adjusted to fair value through income. If the derivative is ahedge, depending on the nature of the hedge, the effective portion of the hedge’s change in fair valueis either (1) offset against the change in fair value of the hedged asset, liability or firm commitmentthrough income or (2) held in equity until the hedged item is recognised in income. If the hedgecriteria are no longer met, the derivative instrument is accounted for as a trading instrument. If aderivative instrument designated as a hedge is terminated, the gain or loss is deferred and amortisedover the shorter of the remaining contractual life of the terminated risk management instrument or thematurity of the designated asset or liability. Earnings Per Share
Under Accounting Practices Adopted in Brazil, earnings per share is based on the number of
shares outstanding at the end of the year, although a weighted-average basis is acceptable.
U.S. GAAP requires publicly held companies to present earnings per share, including earnings per
share from continuing operations and net income per share on the face of the income statement, andthe per share effect of changes in accounting principles, discontinued operations and extraordinaryitems either on the face of the income statement or in a note. U.S. GAAP also requires a dualpresentation of earnings per share, basic and diluted. Companies should base computations of basicearnings per share data on the weighted average number of common shares outstanding during theperiod. Diluted earnings per share is calculated on the same basis except that effect is given to alloutstanding dilutive potential common shares in determining weighted average number of commonshares outstanding during each year presented. Potential common shares represent a security or othercontracts that may entitle its holder to obtain common shares during the reporting period or after theend of the reporting period. Comprehensive Income
Accounting Practices Adopted in Brazil do not embody the concept of comprehensive income. U.S.
GAAP requires the disclosure of comprehensive income which is comprised of net income and ‘‘othercomprehensive income’’ that includes charges or credits directly to equity which are not the result oftransactions with owners. Examples of other comprehensive income items are cumulative translationadjustments, unrealised gains and losses for available-for-sale securities, as well as the effects of theeffective portion of cash flow hedge accounting and minimum pension liabilities. Guarantees
Under Accounting Practices Adopted in Brazil, no specific pronouncement addresses the
accounting and disclosures requirements for guarantees. In November 2002, the FASB issuedInterpretation No. 45, ‘‘Guarantor’s Accounting and Disclosure Requirements for Guarantees,Including Indirect Guarantees of Indebtedness of Others’’ (‘‘FIN No. 45’’). This interpretation requirescertain disclosures to be made by a guarantor in its interim and annual financial statements about itsobligations under certain guarantees that it has issued. It also requires a guarantor to recognize, at theinception of a guarantee, a liability for the fair value of the obligation undertaken in issuing theguarantee. The disclosure requirements of FIN No. 45 are effective for interim and annual periodsending after December 15, 2002. The initial recognition and initial measurement requirements of FINNo. 45 are effective prospectively for guarantees issued or modified after December 31, 2002.
In the next few years it is likely your child will have fevers on at least a few occasions. We hope this addresses some of your concerns and questions about fevers in children. Why do children get fevers? Fevers in children are usually due to infections. There is good evidence that the fever is part of the body’s immune response to an infection and helps to fight off the illness. With mo
mis à jour le 2 novembre 1999 Objectifs 1. Citer les éléments cliniques et para-cliniques qui, en présence d'épisodes de dyspnée, orientent vers une origine asthamatique. 2. Décrire une crise d'asthme chez un enfant. 3. Décrire l'état de mal asthmatique. 4. Indiquer les modalités de la recherche d'une étiologie allergique chez un enfant asthmatique. 5. Rédiger l'ordonnance