In applying accounting practices, AXIA Energia Management uses judgments and estimates related to the carrying amounts of revenues, expenses, assets and liabilities, as well as the disclosures in the explanatory notes.

The estimates and their assumptions are based on historical experience and other factors considered relevant and are constantly reviewed. The effects of the reviews to accounting estimates are recognized in the year in which the estimates are revised.

Although these estimates and assumptions are permanently monitored and reviewed by the Company’s Management, the materialization of the book value of revenues, expenses, assets and liabilities is inherently uncertain, due to the use of judgment. As a consequence, the Company may suffer effects as a result of imprecision in these estimates and judgments that are substantial in future periods, which may have a material adverse effect on its financial condition, on the results of its activities and / or on its cash flows.

No.

Note

Significant estimates and judgments

9/13

Accounts receivable/Financing and loans receivable

Expected Credit Loss Assessment

Deferred income tax and social contribution - asset

Realization of tax credits based on estimates of future taxable income

Contractual Transmission Assets

Remuneration rate for concession contracts, price allocation to performance obligations and cash flow forecast

16.3/19/22

Losses on investments, recoverable value of long-term assets and onerous contracts

Present value of future cash flows, considering the discount rate determined by the Company

16.1

Business Combination

Fair value of the assets and liabilities of the transaction

Post-employment Benefit

Actuarial assumptions of post-employment benefit plans

Provisions for litigation and contingent liabilities

Estimates of losses in legal proceedings

37.3.2

Derivative Financial Instruments

Fair value of financial instruments