7. Accounts receivable
| Schedule of accounts receivable |
|
|
|
| December 31, |
Notes |
2025 |
2024 |
| Receivables from contracts with customers |
|
|
|
| Third parties |
|
|
|
| Iron Ore Solutions |
|
1,276 |
1,540 |
| Vale Base Metals |
|
944 |
788 |
| Other |
|
16 |
19 |
| Related parties |
33(b) |
115 |
63 |
| Accounts receivable |
|
2,351 |
2,410 |
| Expected credit loss |
|
(54) |
(52) |
| Accounts receivable, net |
|
2,297 |
2,358 |
Provisionally priced
commodities sales - The Company is mainly exposed to iron ore and copper price risk. The determination
of the final sales price for these commodities is based on the pricing period outlined in the sales contracts, typically occurring after
the revenue recognition date. Consequently, the Company initially recognizes revenue using a provisional invoice. Subsequently, the receivables
associated with provisionally priced products are measured at fair value through profit or loss (note 19). Any fluctuations in the value
of these receivables are reflected in the Company's net operating revenue. In the year ended December 31, 2025, the net operating revenue
arising from fair value adjustments to provisionally priced contracts totaled US$548.
The sensitivity of the Company’s
risk related to the final settlement of provisionally priced accounts receivable is detailed below:
| Schedule of sensitivity of the company's risk on final settlement |
|
|
|
|
| |
December 31, 2025 |
| |
Thousand metric tons |
Provisional price (US$/ton) |
Variation |
Effect on revenue (US$ million) |
| Iron ore |
19,006 |
107 |
+-10% |
+- 203 |
| Pellet |
157 |
102 |
+-10% |
+- 2 |
| Copper |
61 |
11,044 |
+-10% |
+- 75 |
Accounting policy
|
|
The accounts receivables represent the
amounts receivable from the sale of products and services rendered by the Company and are recognized at fair value and subsequently measured
at amortized cost using the effective interest method, except for the components related to commodity sales with provisional pricing,
which are subsequently measured at fair value through profit or loss.
Accounts
receivables
The Company applies the IFRS 9 - Financial
Instruments simplified approach for measuring expected credit losses. This approach utilizes a lifetime expected loss allowance for the
accounts receivable measured at amortized cost. A provision matrix, established by the Company, forms the basis for this measurement.
The matrix incorporates historical credit loss experience, adjusted for forward-looking factors specific to the economic environment,
and considers any financial guarantees associated with these accounts receivables.
|
|