Company: DLO
Filing Date: 2025-04-24
Form Type: 20-F
Source: 0000950170-25-058197
Chunk: 125

Company: dLocal Ltd
Filing Date: 2025-04-24
Form: 20-F
Item: Item 16K
Chunk 125
---
 of the end of the reporting period;

• Income and expenses are translated at average exchange rates; and

• All resulting exchange differences are recognized in other comprehensive income.

The results and financial position of foreign operations whose functional currency is the currency of a hyperinflationary economy are translated into the presentation currency as follows:

• All amounts (i. e., assets, liabilities, equity items, income and expenses) are translated at the closing rate at the date of the most recent statement of financial position.

On consolidation, exchange differences arising from the translation of foreign entities are recognized in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss as part of the gain or loss on sale.

2.4. Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term, highly liquid financial instruments with original maturities of three months or less. dLocal classifies a financial instrument as a cash equivalent when the following conditions are met:

• The financial instrument can be immediately converted into a known amount of cash;

• The fair value of the financial instrument approximates its carrying value; and

• The financial instrument is subject to an insignificant risk of a valuation change.

Cash equivalents are measured at amortized cost and/or fair value through profit or loss depending on its nature (refer to note 31), and are presented within current asserts due to their short-term maturity.

2.5. Financial instruments - initial recognition and subsequent measurement

i) Financial assets

Initial recognition and measurement

Financial assets are initially recognized at fair value and subsequently held at amortized cost, fair value through other comprehensive income (“ OCI”), or fair value through profit or loss (“ FVPL”).

Upon initial recognition, financial assets are classified depending on the asset’s contractual cash flow characteristics and the Group’s business model for managing such cash flows. The Group initially measures a financial asset at its fair value, or if a financial asset will not be held at fair value through profit or loss, fair value plus directly attributable transaction costs. Except for trade receivables that do not contain a significant financing component, or financial assets where the Group has applied IFRS 15’s practical expedient, financial assets are generally recognized at fair value plus directly attributable transaction costs and are held at amortized cost. Trade receivables that do not contain a significant financing component or for which the Group has applied IFRS