The duty of the Federal Government to compensate electric utilities for unmanageable costs and their disclosure on the balance sheet according to international accounting standards

Abstract

Since the issuance of OCPC 08 (Technical Guideline of the Accounting Pronouncements
Committee 08), electric utility companies have had the right to be compensated by the
Government in the event of non-recovery of unmanageable costs upon termination of their
contracts. Indeed, the potential recognition of this obligation by the Federal Government could
have a very negative effect on public accounts. Effective oversight of the recovery of these costs
over the term of the contracts along with the correct accounting treatment by the Government,
namely the Tax Risks Attachment of the Federal Government Balance Sheet, are crucial to the
sustainable management of public accounts. This management also aims to meet the principle
of publicity, established by article 37 of the Federal Constitution. This study examines the effects
of demonstrating, measuring, and reporting this complex category of assets in the electric power
sector and indicates potential topics of study on their management, monitoring, and control,
conducted either internally by agencies of the Federal Executive Branch or externally by the
Federal Court of Accounts - Brazil.