Company: DLO
Filing Date: 2025-04-24
Form Type: 20-F
Source: 0000950170-25-058197
Chunk: 137

Company: dLocal Ltd
Filing Date: 2025-04-24
Form: 20-F
Item: Item 16K
Chunk 137
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, and reduce when payments are made. The ROU asset will amortize to the income statement over the life of the lease.

The lease liability is remeasured when there is a change in one of the following:

• Future lease payments arising from a change in an index or rate;

• The Group’s estimate of the amount expected to be payable under a residual value guarantee; or

• The Group’s assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset or is recorded in the Statement of Comprehensive Income if the carrying amount of the ROU asset has been reduced to nil. On the balance sheet, the ROU assets are included within property, plant and equipment and the lease liabilities are in separate lines.

Short-term Leases

The Group applies the recognition exemption in IFRS 16 for leases with a term not exceeding 12 months. For these leases, the lease payments are recognized as an expense on a straight ­line basis over the lease term unless another systematic basis is more appropriate.

The Group has executed lease contracts of one year or less in the following countries: Malta, Israel, Brazil, China, Chile, Colombia, India, Singapore, and Argentina. In those locations, the Group utilizes co-working facilities that are subject to short-term contractual arrangements. Several suitable alternatives exist in each location. This provides maximum flexibility to increase, reduce or terminate these arrangements based on changes in the Group’s operating plans while minimizing relocation and buildout costs. These locations do not require company-specific infrastructure, and the cost of returning the leased asset is insignificant. Upon expiration of each contract, the Group reassesses whether to extend or terminate the agreement based on the level of local activity, market trends and strategic plans for each location.

Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for the Group leases, the incremental borrowing rate is used. The incremental borrowing rate represents the cost to borrow the funds necessary to acquire an asset of similar value in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

• uses recent third-party financing received by the individual lessee where possible, adjusted to reflect changes in financing conditions since the applicable third party financing was received; or

• derives the incremental borrowing rate using the risk-free interest rate, adjusted for credit risk for leases held by the Group, which does