The Entity has been monitoring the spread of the Coronavirus (COVID-19), which was declared a pandemic by the World Health Organization (WHO). The Entity has been following the decisions of the WHO and the guidance of the Ministry of Health and decisions of the State and Municipal governments, and, since March 2, 2020, has been adopting measures to fight the COVID-19 pandemic, aiming to safeguard the health and interests of all the parties involved in the activities of the institution and preserve business continuity.
As regards onsite teaching, from March 20, 2020 the Entity's onsite undergraduate and graduate education activities were replaced by remote activities through the digital platform "Studeo", to ensure the learning process of students, without affecting the completion of the activities of the semester. The 2021 school year began on February 15 and classes returned in a hybrid form; a different group of students have onsite classes each week, and the other students have classes via the digital platform.
The Entity's distance learning activities were not impacted, and onsite tests were replaced by online tests. The new enrollment and re-enrollment processes continue as usual, with no initial impact on the recognition of revenue of enrolled students.
As to the Entity's administrative activities, it adopted measures such as the change from onsite work to remote work from March 23, 2020, for positions that permit this type of system. There is no estimated date for the return of employees to onsite classes. Therefore, no relevant impacts related to this topic were identified in the Entity's financial statements.
Despite the circumstances imposed by Covid-19, the Entity reported a profit before taxes for the year ended December 2021 of R$218,465, 10% higher if compared to the same period of 2020, due to the increase in the number of students by 11%, mainly from EAD. The default rate averaged 16.86%, increasing by 2.8% compared to the same period last year (16.40% in 2020), the variation is attributed to the effects and prolongation of the pandemic situation.
2. | Summary of significant accounting policies |
The main accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied in the years presented, unless otherwise stated.
2.1 | Functional and presentation currency |
The items included in the financial statements are measured using the currency of the primary economic environment in which the Entity operates ("the functional currency").
The financial statements are presented in Brazilian reais (R$), which is the Entity's functional and presentation currency.
2.2 | Cash and cash equivalents |
Cash and cash equivalents include cash on hand and short-term highly liquid bank deposits with original maturities of three months or less, and with immaterial risk of change in value.