| 2.2.6 | Trade accounts receivable |
Amounts receivable from installment sales are adjusted to present value, if applicable, at an interest rate compatible with the market at the time of the sale, applied to the receivable in accordance with the term for receipt.
When the Company has objective evidence that it will be unable to recover the amount of a trade receivable, due to client’s financial difficulties, bankruptcy or reorganization procedures of the debtor, or due to the fact that the amount receivable has been outstanding for a term that leads the Company to conclude that receipt is doubtful, a reduction is recognized in receivables for doubtful accounts. The amount recognized as a reduction in accounts receivable is the difference between the carrying amount and the estimated recoverable amount.
Trade accounts receivable also include outstanding amounts of revenues from construction contracts, recognized under the percentage of completion method, by the cost incurred or physical progress of the contracts, recognized at the net amount of advances received from customers and estimated probably losses to doubtful debts.