Arco Platform (ARCE) 20-F 31 Mar 20 2019 FY Annual report (foreign) Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2019shares
Document and Entity Information
Entity Registrant Name	Arco Platform Ltd.
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Document Shell Company Report	false
Entity Incorporation, State or Country Code	E9
Entity Well-known Seasoned Issuer	No
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Central Index Key	0001740594
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Class A
Document and Entity Information
Entity Common Stock, Shares Outstanding	27,538,240
Class B
Document and Entity Information
Entity Common Stock, Shares Outstanding	27,400,848

Consolidated statements of fina

Consolidated statements of financial position R$ in Thousands, $ in Thousands	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)
Current assets
Cash and cash equivalents	R$ 48900	R$ 12301
Financial investments	574,804	806,789
Trade receivables	329,428	136,611
Inventories	40,106	15,131
Recoverable taxes	15,612	11,227
Financial instruments from acquisition of interests	3,794
Related parties	1,298
Other assets	14,630	6,091
Total current assets	1,028,572	988,150
Non current assets
Financial instruments from acquisition of interests	32,152	26,630
Deferred income tax	156,748	99,460
Recoverable taxes	6,613	1,033
Financial investments	4,690	4,370
Related parties	14,813	1,226
Other assets	14,399	1,060
Investments and interests in other entities	48,574	11,862
Property and equipment	21,328	13,347
Right-of-use assets	21,631
Intangible assets	1,811,903	187,740
Total non current assets	2,132,851	346,728
Total assets	3,161,423	1,334,878
Current liabilities
Trade payables	34,521	14,845
Labor and social obligations	68,511	15,888
Taxes and contributions payable	7,508	2,555
Income taxes payable	52,038	17,294
Advances from customers	25,626	5,997
Lease liabilities	6,845
Loans and financing	98,561
Financial instruments from acquisition of interests		51
Accounts payable to selling shareholders	117,959	830
Other liabilities	607	428
Total current liabilities	412,176	57,888
Non-current liabilities
Labor and social obligations	2,801
Lease liabilities	19,012
Financial instruments from acquisition of interests	33,940	25,046
Provision for legal proceedings	251	131
Deferred income tax		1,378
Accounts payable to selling shareholders	1,098,273	180,551
Other liabilities	160
Total non current liabilities	1,154,437	207,106
Total liabilities	1,566,613	264,994
Equity
Share capital	11	10
Capital reserve	1,607,622	1,089,505
Share-based compensation reserve	84,546	67,350
Accumulated losses	(97,369)	(86,687)
Equity attributable to equity holders of the parent	1,594,810	1,070,178
Non-controlling interests		(294)
Total equity	1,594,810	1,069,884
Total liabilities and equity	R$ 3161423	R$ 1334878

Consolidated statements of inco

Consolidated statements of income (loss) and comprehensive income (loss) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated statements of income (loss) and comprehensive income (loss)
Net revenue	R$ 572837	R$ 380981	R$ 244382
Cost of sales	(117,258)	(80,745)	(58,517)
Gross profit	455,579	300,236	185,865
Selling expenses	(199,780)	(113,270)	(65,314)
General and administrative expenses	(191,438)	(129,754)	(48,931)
Other income (expenses), net	(6,287)	4,856	3,299
Operating profit	58,074	62,068	74,919
Finance income	72,047	36,618	12,531
Finance costs	(170,855)	(198,795)	(20,389)
Finance result	(98,808)	(162,177)	(7,858)
Share of loss of equity-accounted investees	(1,800)	(792)	(705)
Profit (loss) before income taxes	(42,534)	(100,901)	66,356
Income taxes - income (expense)
Current	(46,850)	(26,553)	(31,010)
Deferred	79,953	44,538	8,294
Income taxes benefit (expense)	33,103	17,985	(22,716)
Profit (loss) for the year	(9,431)	(82,916)	43,640
Other comprehensive income for the year	0	0	0
Total comprehensive income (loss) for the year	(9,431)	(82,916)	43,640
Profit (loss) attributable to Equity holders of the parent	(9,431)	(82,380)	44,255
Profit (loss) attributable to Non-controlling interests		(536)	(615)
Class A common shares
Income taxes - income (expense)
Profit (loss) attributable to Equity holders of the parent	R$ 4379	R$ 37047	R$ 19902
Basic earnings per share - in Brazilian reais per share	R$ 0.18	R$ 1.64	R$ 0.88
Diluted earnings per share - in Brazilian reais per share	R$ 0.18	R$ 1.64	R$ 0.85
Class B common shares
Income taxes - income (expense)
Profit (loss) attributable to Equity holders of the parent	R$ 5052	R$ 45333	R$ 24353
Basic earnings per share - in Brazilian reais per share	R$ 0.18	R$ 1.64	R$ 0.88
Diluted earnings per share - in Brazilian reais per share	R$ 0.18	R$ 1.64	R$ 0.85

Consolidated statements of chan

Consolidated statements of changes in equity - BRL (R$) R$ in Thousands	Share capital	Capital reserve	Legal reserve	Retained earnings reserve	Share-based compensation reserve	Retained earnings/Accumulated losses	Equity attributable to owners of parent	Non-controlling interests	Total
Beginning balance at Dec. 31, 2016	R$ 48517	R$ 81914	R$ 5952	R$ 99506	R$ 5163		R$ 241052	R$ 116	R$ 241168
Profit (loss) for the year						R$ 44255	44,255	(615)	43,640
Total comprehensive income (loss)						44,255	44,255	(615)	43,640
Dividends paid				(57,210)			(57,210)		(57,210)
Capital increase	7,380	78,768					86,148		86,148
Non-controlling interest								610	610
Share-based compensation plan					1,890		1,890		1,890
Legal reserve			2,213			(2,213)
Minimum mandatory dividends						(10,511)	(10,511)		(10,511)
Earnings retention				31,531		(31,531)
Ending balance at Dec. 31, 2017	55,897	160,682	8,165	73,827	7,053		305,624	111	305,735
Change in accounting policy						(4,307)	(4,307)		(4,307)
Restated opening balance	55,897	160,682	8,165	73,827	7,053	(4,307)	301,317	111	301,428
Profit (loss) for the year						(82,380)	(82,380)	(536)	(82,916)
Total comprehensive income (loss)						(82,380)	(82,380)	(536)	(82,916)
Corporate reorganization	(55,890)	63,444	R$ 8165	R$ 73827			(74,438)		(74,438)
Tax benefit on tax deductible goodwill		46,314					46,314		46,314
Capital increase		3,091					3,091		3,091
Issuance of common shares in initial/follow-on public offering	3	895,179					895,182		895,182
Share issuance costs		(79,205)					(79,205)		(79,205)
Non-controlling interest								131	131
Share-based compensation plan					60,297		60,297		60,297
Ending balance at Dec. 31, 2018	10	1,089,505			67,350	(86,687)	1,070,178	(294)	1,069,884
Change in accounting policy						(1,251)	(1,251)		(1,251)
Restated opening balance	10	1,089,505			67,350	(87,938)	1,068,927	(294)	1,068,633
Profit (loss) for the year						(9,431)	(9,431)		(9,431)
Total comprehensive income (loss)						(9,431)	(9,431)		(9,431)
Corporate reorganization		(36,624)					(36,624)		(36,624)
Tax benefit on tax deductible goodwill		(46,314)					(46,314)		(46,314)
Capital increase	1	13,829					13,830		13,830
Issuance of common shares in initial/follow-on public offering		589,602					589,602		589,602
Share issuance costs		(18,223)					(18,223)		(18,223)
Non-controlling interest								R$ 294	294
Share-based compensation plan					33,043		33,043		33,043
Restricted stocks transferred		15,847			(15,847)
Ending balance at Dec. 31, 2019	R$ 11	R$ 1607622			R$ 84546	R$ 97369	R$ 1594810		R$ 1594810

Consolidated statements of cash

Consolidated statements of cash flows R$ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
Operating activities
Profit (loss) before income taxes	R$ 42534	R$ 100901	R$ 66356
Adjustments to reconcile profit (loss) before income taxes
Depreciation and amortization	48,314	19,594	14,288
Inventory reserves	8,476	7,252	4,481
Allowance for doubtful accounts	17,392	9,588	5,227
Loss on sale/disposal of property and equipment and intangible	3,499	138	664
Fair value change in financial instruments from acquisition interests	(473)	(659)	6,657
Changes in accounts payable to selling shareholders	89,403	130,378
Share of loss of equity-accounted investees	1,800	792	705
Changes in fair value of step acquisitions	(3,708)		(1,184)
Share-based compensation plan	33,043	60,297	1,890
Interest accretion on acquisition liability	42,206	8,704	11,179
Income from non-cash equivalents	(45,797)
Interest on lease liabilities	1,489
Provision for legal proceedings	120	131
Provision for payroll taxes (restricted stock units)	8,333
Foreign exchange loss	555	34,435
Gain on sale of investment	(3,286)
Other financial cost/revenue, net	(1,360)
Adjustments to reconcile profit (loss) before income taxes	157,472	169,749	110,263
Changes in assets and liabilities
Trade receivables	(136,407)	(57,020)	(24,347)
Inventories	(14,637)	(3,563)	(8,914)
Recoverable taxes	(8,494)	(3,807)	(2,777)
Other assets	(16,035)	(2,254)	(320)
Trade payables	8,455	10,256	(1,512)
Labor and social obligations	15,950	7,169	3,081
Taxes and contributions payable	1,951	1,476	553
Advances from customers	19,997	99	3,950
Other liabilities	(268)	(3,342)	(654)
Cash generated from operations	27,984	118,763	79,323
Income taxes paid	(34,747)	(26,639)	(16,673)
Interest paid on lease liabilities	(852)
Net cash flows from (used in) operating activities	(7,615)	92,124	62,650
Investing activities
Acquisition of property and equipment	(10,991)	(6,854)	(5,314)
Payment of investments and interests in other entities	(41,853)	(2,000)	(19,900)
Acquisition of subsidiaries, net of cash acquired	(798,885)		(28,347)
Payment of accounts payable to selling shareholders		(14,756)
Acquisition of intangible assets	(43,102)	(29,403)	(6,047)
Purchase of financial investments	277,389	(727,951)	(17,361)
Loans to related parties	(14,000)		(300)
Net cash flows used in investing activities	(631,442)	(780,964)	(77,269)
Financing activities
Capital increase	13,830	3,091	86,148
Capital increase - proceeds from public offering	589,602	895,182
Share issuance costs	(18,897)	(78,531)
Payments of lease liabilities	(4,407)
Payment of loans and financing	(563)
Loans and financing	97,574
Payment to owners to acquire entity's shares	(928)
Dividends paid		(85,000)	(75,053)
Net cash flows from financing activities	676,211	734,742	11,095
Foreign exchange effects on cash and cash equivalents	(555)	(34,435)
Increase (decrease) in cash and cash equivalents	36,599	11,467	(3,524)
Cash and cash equivalents at the beginning of the year	12,301	834	4,358
Cash and cash equivalents at the end of the year	48,900	12,301	834
Increase (decrease) in cash and cash equivalents	R$ 36599	R$ 11467	R$ 3524

Corporate information

Corporate information	12 Months Ended
	Dec. 31, 2019
Corporate information
Corporate information	1 Corporate information Arco Platform Limited (“Arco”) is a holding company incorporated under the laws of the Cayman Islands on April 12, 2018 and whose shares are publicly traded on the National Association of Securities Dealers Automated Quotations Payments exchange (NASDAQ) under the ticker symbol “ARCE”. Arco and its subsidiaries are collectively referred to as the Company. Arco became the parent company of Arco Educação S.A. ("Arco Brazil") through the completion of the corporate reorganization and initial public offering of the Company in 2018. Arco Brazil is the holding company of the operating subsidiaries, including EAS Educação S.A. (“EAS”), which provides educational content from basic to secondary education (“K‑12 curriculum”). Since 2015, the Company has been investing in technology and its printed methodology evolved to an educational platform, capable of delivering the entire K‑12 curriculum content. The Company offers a complete pedagogical methodology using technology features to deliver educational content to improve the learning process. The Company’s activities comprise the editing, publishing, advertising and sale of educational content for private schools. The Company has an asset-light, highly scalable business model that emphasizes operational efficiency and profitability. Arco operates through long-term service contracts with private schools. These contracts generally have initial terms that average three years, pursuant to which educational content is provided in printed and digital format to private schools. The revenue is driven by the number of enrolled students at each customer using the solutions and the agreed upon price per student per year, all in accordance with the terms and conditions set forth in each contract. As a result, the Company benefits from high visibility in its net revenue and operating margin, which is calculated by dividing the operating profit by net revenue over a given period. The address of the Company’s principal executive office is 2840 Rua Augusta, 11th Floor, Consolação, São Paulo, Brazil. These consolidated financial statements were authorized for issue by the Board of Directors on March 16, 2020. Follow-on public offering On October 29, 2019, Arco completed a follow-on public offering. The public offering of 7,719,503 Class A common shares, consisted of 4,268,847 Class A common shares offered by certain selling shareholders of Arco (the “Selling Shareholders”), including General Atlantic Arco (Bermuda), L.P. (“GA”), and 3,450,656 Class A common shares offered by Arco. In addition, the underwriters purchased 661,112 Class A common shares, under the 30-day option agreement with GA to purchase up to 1,157,925 additional Class A common shares at the public offering price, less underwriting discounts and commissions. Arco did not receive any proceeds from the sale of Class A common shares by the Selling Shareholders. The public offering price was US$43.00 per common share, for gross proceeds of US$331.9 million, for both, the selling shareholders and the Company. The Company received net proceeds of US$143,908 (or R$574,767), after deducting US$3,709 (or R$14,835)) in underwriting discounts and commissions. In addition, the Company incurred in the amount of R$ 3,387 for audit, consulting and legal services related to the offering.

Significant accounting policies

Significant accounting policies	12 Months Ended
	Dec. 31, 2019
Significant accounting policies
Significant accounting policies	2 Significant accounting policies 2.1 Basis for preparation of the consolidated financial statements The Company’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets, derivative financial instruments and contingent consideration from business combinations that have been measured at fair value. Arco is a holding company and considers the currency of the local environment of the operational companies in Brazil as its functional currency, as this is the environment which drives the dividend income it receives, which is its primary source of revenue. Therefore, the functional currency of the Company is the Brazilian real and the consolidated financial statements are presented in Brazilian reais (“BRL” or “R$”). All amounts are rounded to the nearest thousands, except when otherwise indicated. The consolidated financial statements provide comparative information in respect of the previous period. 2.2 Significant events during the year During the year ended December 31, 2019, the Company had the following changes in its corporate organization: (a) Internal restructurings Escola de Aplicação São José dos Campos Ltda. On January 2, 2019, the Company agreed to sell its shares of Escola de Aplicação São José dos Campos Ltda., which is part of the Company’s Core segment, to its minority shareholders. The transaction price of R$ 3,741 will be received in 16 quarterly installments from January 2022 to October 2025, adjusted by the IGP-M (Brazilian general market price index issued by the FGV – “Fundação Getúlio Vargas”). The gain on sale of investment was R$ 3,286, and is classified in Other income (expenses) net in the statement of income. SAE Digital S.A. On February 1, 2019, EAS spun-off its investment in SAE Digital to a new holding company, which was subsequently merged by SAE Digital and its shares were issued to Arco Brazil. When EAS acquired SAE Digital, goodwill was treated as not deductible. However, after this transaction, SAE Digital has the tax benefit of the deductibility of the goodwill, which will generate a future tax benefit and a deferred tax asset of R$ 5,135. The deductible goodwill amounts to R$ 14,597. The net effect of R$ 9,462 was accounted for in equity. Novagaúcha Editora e Livraria Ltda. On March 31, 2019, Novagaúcha Editora e Livraria Ltda. was merged by Barra Américas Editora Ltda. The goodwill of this transaction is R$ 4,330 and was charged to equity. No tax benefit was generated in this transaction. NS Ventures Participações Ltda. and NS Educação Ltda. On May 1, 2019, continuing the corporate restructuring, SAE Digital merged NS Educação Ltda. (“NS Educação”) and NS Ventures Participações S.A. (“NS Ventures”). In 2017, when NS Ventures acquired a 30% interest in SAE Digital and a 100% interest in NS Educação, the goodwill was treated as not deductible; however, after this transaction, SAE Digital has the tax benefit of the deductibility of the goodwill, which will generate a future tax benefit and a deferred tax asset of R$ 11,762. The deductible goodwill amounts to R$ 34,594. The net effect of R$ 22,832 was accounted for in equity. NLP Soluções Educacionais Ltda. NLP Soluções Educacionais Ltda. (“Pleno”) is a subsidiary founded in 2019 through the contribution of 100% of the share capital of EAS Educação S.A. which is the subsidiary of Arco Brazil, its parent company. Pleno’s corporate purpose is to provide content to develop socio-emotional skills. (b) Acquisition of investments Nave à Vela Ltda. In May 2019, the Company acquired a 13.2% interest in Nave à Vela Ltda. (“Nave”) and such investment was accounted for under the equity method through October 2019, when the Company acquired control and Nave became a consolidated subsidiary of the Company with 51.0% interest in the share capital of Nave. See Note 4b. EEM Licenciamento de Programas Educacionais Ltda. On April 29, 2019, the Company acquired the control of EEM Licenciamento de Programas Educacionais Ltda. (“EEM”) by acquiring 100% of its outstanding ordinary shares and voting interests as described in Note 4a. Sistema Positivo de Ensino On May 7, 2019, the Company announced that it entered into a definitive agreement to acquire Sistema Positivo de Ensino (“Positivo”), one of the largest K‑12 content providers to private schools in Brazil. Positivo is composed of seven entities as follows: Positivo Soluções Didáticas Ltda., Editora Piá Ltda., Osterreich Investimentos – Participações Societárias S.A., Mendel Investimentos – Participações Societárias S.A., Torino Investimentos – Participações Societárias S.A., Remare Investimentos – Participações Societárias S.A., Fahe Investimentos – Participações Societárias S.A. On November 1, 2019 the Company concluded the transaction through its subsidiary EAS and, on the same date, acquired control of Positivo. See Note 4c. Geekie Desenvolvimento de Softwares S.A. In 2019, Arco acquired an additional 31% interest in the share capital of Geekie through a capital increase and the purchase of minority shareholders increasing its total interest to 37.5% as descried in Note 11. 2.3 Basis of consolidation and investments in associates and joint ventures The consolidated financial statements comprise the financial statements of the Company as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017. The table below is a list of the Company’s subsidiaries, associates and joint venture: Principal Investment Direct and indirect interest Name activities Country type 2019 2018 2017 Arco Educação S.A. Holding Brazil Subsidiary 100.0 % 100.0 % — EAS Educação S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Barra Américas Editora Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Distribuidora de Material Didático Desterro Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Novagaúcha Editora e Livraria Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % SAS Sistema de Ensino Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Arco Ventures S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % SAS Livrarias Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % SAE Digital S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Escola de Aplicação São José dos Campos Ltda. Educational services Brazil Subsidiary — 69.6 % 69.6 % International School Serviços de Ensino, Treinamento e Editoração, Franqueadora S.A. Educational content Brazil Subsidiary 51.5 % 51.5 % 51.5 % NS Ventures Participações Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % NS Educação Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % Nave à Vela Ltda. Educational content Brazil Subsidiary 51.0 % — — EEM Licenciamento de Programas Educacionais Ltda. Educational technology Brazil Subsidiary 100.0 % — — NLP Soluções Educacionais Ltda. Educational content Brazil Subsidiary 100.0 % — — Sistema Positivo de Ensino Educational content Brazil Subsidiary 100.0 % — — WPensar S.A. Educational technology Brazil Joint venture 25.0 % 25.0 % 25.0 % Geekie Desenvolvimento de Softwares S.A. Educational technology Brazil Associate 37.5 % 8.05 % 6.5 % Control is achieved when the Company is exposed to, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases control of the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Company’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, and any resulting gain or loss is recognized in profit or loss. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statements of income (loss) and comprehensive income (loss), changes in equity and financial position, respectively. 2.4 Summary of significant accounting policies This note provides a description of the significant accounting policies adopted in the preparation of these consolidated financial statements in addition to other policies that have been disclosed in other notes to these consolidated financial statements. These policies have been consistently applied to all periods presented, unless otherwise stated. a) Business combinations and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in general and administrative expenses. When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date. Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognized in the statement of income (loss) in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each segment that is expected to benefit from the combination. Where goodwill has been allocated to a segment and part of the operation within that segment is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the segment unit retained. The current Brazilian tax law allows the deductibility of the acquisition date goodwill and fair value of net assets acquired when a corporate reorganization occurs after acquisition by the Company (i.e. when the Company merges or spins off the businesses acquired). Until such action occurs, the tax and accounting bases of the net assets acquired are the same as of the acquisition date and no deferred tax effects are recognized. Certain acquired subsidiaries utilize the presumed profit regime as described in Note 24.a to calculate income taxes. Under this regime, there is no difference between the carrying amount and related tax basis of assets and liabilities and therefore no deferred income taxes were recorded in these financial statements at acquisition date or any subsequent periods. b) Investment in associates and joint venture An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Company’s investments in its associate and joint venture are accounted for using the equity method. Under the equity method of accounting, the investment in an associate or a joint venture is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint ventures is included in the carrying amount of the investment and is not tested for impairment separately. The statement of income (loss) reflects the Company’s share of the results of operations of the associate or joint venture. In addition, when there has been a change recognized directly in the equity of the associate or joint venture, the Company recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture. The aggregate of the Company’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of income (loss) outside operating profit and represents profit or loss after tax of the associate or joint venture. The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on its investment in its associate or joint venture. At each reporting date, the Company determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within share of profit (loss) of equity-accounted investees in the statement of income (loss). c) Current versus non-current classification The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: · Expected to be realized or intended to be sold or consumed in the normal operating cycle; · Held primarily for the purpose of trading; · Expected to be realized within twelve months after the reporting period; or · Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: · It is expected to be settled in the normal operating cycle; · It is held primarily for the purpose of trading; · It is due to be settled within twelve months after the reporting period; or · There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. d) Fair value measurement The Company measures financial instruments such as certain financial investments and derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: · in the principal market for the asset or liability; or · in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: · Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities. · Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. · Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. At each reporting date, the Company analyzes the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company’s accounting policies. For this analysis, the Company verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Company also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above. e) Financial instruments – initial recognition and measurement A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. f) Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price under IFRS 15. For a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income (OCI), it should give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Subsequent measurement For purposes of subsequent measurement, financial assets are classified as: amortized cost or fair value through profit or loss. There are no financial assets designated as fair value through OCI. Financial assets at amortized cost Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Company’s financial assets at amortized cost include trade receivables and certain financial investments. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss. This category includes derivative instruments. A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Company’s consolidated statement of financial position) when: · The rights to receive cash flows from the asset have expired; or · The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement‑and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay. Impairment Further disclosures relating to impairment of financial assets are also provided in the following notes: · Disclosures for significant assumptions - Note 3 · Trade receivables, including contract assets - Note 7 The Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Company considers a financial asset in default when contractual payments are 360 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. g) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade payables, loans and borrowings, financial instruments from acquisition of interests and accounts payable to selling shareholders. Subsequent measurement For purposes of subsequent measurement, financial liabilities are classified in two categories: · Financial liabilities at fair value through profit or loss · Financial liabilities at amortized cost (loans and borrowings) Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered by the Company that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the statement of income (loss). Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. Financial liabilities at amortized cost (loans and borrowings) After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of income (loss). Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of income (loss). h) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. i) Derivative financial instruments Initial recognition and subsequent measurement The Company has derivative financial instruments from call and put options from acquisitions of subsidiaries, associates and joint venture. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are recorded directly to finance result. j) Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term financial investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and shor

Significant accounting judgemen

Significant accounting judgements, estimates and assumptions	12 Months Ended
	Dec. 31, 2019
Significant accounting judgements, estimates and assumptions
Significant accounting judgements, estimates and assumptions	3 Significant accounting judgements, estimates and assumptions The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Accounting estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are recognized prospectively. Other disclosures relating to the Company’s exposure to risks and uncertainties includes: · Capital management – Note 27 · Financial instruments risk management – Notes 26 and 27 · Sensitivity analyses disclosures – Note 27 Estimates and assumptions The key assumptions about the future and other key sources of estimated uncertainty as of the reporting date that include a significant risk of a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances that arise and that are beyond the Company’s control. Such changes are reflected in the assumptions where they occur. Impairment of non-financial assets Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) or group of CGU exceeds its recoverable amount, defined as the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on data available from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a discounted cash flow model (“DCF” model). The cash flows are derived from the budget for the next five years and do not include restructuring activities to which the Company has not yet committed or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as to expected future cash-inflows and the growth rate used for extrapolation purposes. The Company determined that its operating segment is the cash generating unit. These estimates are most relevant to goodwill that are recognized by the Company. The key assumptions used to determine the recoverable amount for the different operating segments, including a sensitivity analysis, are disclosed and further explained in Note 14. Provision for expected credit losses of trade receivables and contract assets The Company uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for customer. The provision matrix is initially based on the Company’s historical observed default rates. The Company calibrates the matrix to adjust the historical credit loss experience with forward-looking information. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The information about the ECLs on the Company’s trade receivables and contract assets is disclosed in Note 7. Share-based payment Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled transactions, the Company uses the Black & Scholes model. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 18b. Taxes Deferred tax assets are recognized for deductible temporary differences and unused tax credits from net operating losses carryforward to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. The Company has R$ 4,066 (2018: R$ 10,427) of unrecognized unused tax loss carryforwards as of December 31, 2019 related to a subsidiary that has a history of losses. Such unused tax loss carryforwards do not expire and may not be used to offset taxable income of other subsidiaries of the Company. See Note 24. Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs into these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required to estimate fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. See Note 26 for further disclosures. Contingent consideration, resulting from business combinations, is valued at fair value as of the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial liability, it is subsequently remeasured at each reporting date. This determination of fair value is based on discounted cash flows. The key assumptions taken into consideration are the probability of meeting each performance target and the discount factor (see Notes 6 and 26 for additional information). Any contingent consideration is classified as financial instruments from acquisition of interests (see Note 16).

Business combinations and acqui

Business combinations and acquisition of non-controlling interests	12 Months Ended
	Dec. 31, 2019
Business combinations and acquisition of non-controlling interests
Business combinations and acquisition of non-controlling interests	4 Business combinations and acquisition of non-controlling interests The fair value of the identifiable assets and liabilities as of the date of each acquisition was: Fair value as of the acquisition date 2019 2017 NS International EEM Nave Positivo Educação School Assets Cash and cash and equivalents 219 1,565 37,635 1 689 Trade receivables 126 896 72,780 — 10,576 Inventories — 897 13,664 — 1,837 Recoverable taxes 12 7 99 — 173 Deferred taxes — — 7,518 — — Other assets 14 284 1,526 — 470 Property and equipment 80 292 4,760 — 323 Right-of-use assets — — 5,241 — — Intangible assets 5,866 19,009 773,134 9,707 29,736 6,317 22,950 916,357 9,708 43,804 Liabilities Trade payables (48) (271) (12,463) — (2,327) Labor and social obligations (240) (1,444) (29,607) — (696) Taxes and contributions payable (109) (50) (2,937) — (119) Income taxes payable — (2) (22,643) — (410) Leases — — (5,374) — — Loans and financing (548) — — — — Other liabilities (156) (546) — — (340) (1,101) (2,313) (73,024) — (3,892) Total identifiable net assets at fair value 5,216 20,637 843,333 9,708 39,912 Goodwill arising on acquisition 13,069 37,557 830,028 28,826 27,598 Purchase consideration transferred 18,285 58,194 1,673,361 38,534 67,510 Cash paid 16,355 21,098 800,851 29,037 — Capital contribution — — — — 5,300 Forward contract of controlling interest at acquisition — 29,728 — — 30,144 Retained payments 1,930 — 872,510 — — Deferred payments — — — 9,497 — Fair value of previously held interest in a step acquisition — 7,368 — — 32,066 Analysis of cash flows on acquisition: Transaction costs of the acquisition (included in cash flows from operating activities) (649) (467) (27,389) (498) (85) Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities) (16,136) (19,533) (763,216) (29,036) 689 (a) EEM Licenciamento de Programas Educacionais S.A. (“Escola em Movimento”) On April 29, 2019, the Company agreed to acquire control of Escola em Movimento, by acquiring 100% of its outstanding ordinary shares and voting interests. The Company acquired Escola em Movimento to expand both its existing product portfolio and customer base. The acquisition was subject to CADE’s approval, the Brazilian anti-trust agency, which was a condition precedent for closing the acquisition. CADE approved the acquisition in May 2019, and the transaction closing date occurred on June 4, 2019. Escola em Movimento is an application developer that enhances communication between schools and parents. The purchase consideration transferred was R$ 18,285. The amount of R$ 16,095 was paid on the acquisition date; R$260 was paid on September 29, 2019 and R$ 1,930 has been retained for the period of 2 years as a guarantee for the payment of any contingent liabilities that may arise. Any remaining balance will be transferred to the former owners of the acquired entity. The amount will be released in two equal annual installments R$ 965, adjusted by the Brazilian basic interest rate (SELIC). The Company did not recognize deferred taxes related to the business combination because the tax basis and accounting basis, including fair value adjustments, were the same at the acquisition date. Goodwill The goodwill recorded on the acquisition was R$ 13,069 and it is expected to be deductible for tax purposes after the Company merges the acquiree. For the purpose of impairment testing, the goodwill has been allocated to the Supplemental operating segment. The goodwill acquired is primarily attributable to the expected synergies and other benefits from combining the assets and activities of Escola em Movimento with those of the Company. The goodwill paid is based on the Business Plan prepared for purposes of the acquisition, and the principal business assumptions used were considered by the administration as appropriate. Transaction costs Transaction costs of R$ 649 were expensed and are included in general and administrative expenses on December 31, 2019. Measurement of fair value The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer relationship Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Software Replacement cost The method considers the amount that an entity would have to pay to replace at the present time, according to its current worth. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence. From the date of acquisition, EEM contributed with R$ 2,395 of net revenue and with R$ 2,918 of loss before income taxes for the year ended December 31, 2019 to the Company. If the combination had taken place at the beginning of the year ended December 31, 2019, net revenue would have been R$ 574,391 and loss before income taxes for the Company would have been R$ 43,095. (b) Nave à Vela Ltda. (“Nave) Nave à Vela (“Nave”) is a 2019 Arco Platform acquisition. Based on the trend that education focuses more on the development of competence-based learning than the traditional content knowledge-based, Arco decided to invest in Nave. Nave offers a competence-based learning solution, with a proprietary, high-quality content and methodology fully integrated with K12 curriculum. Arco bought as a first step a 13.2% stake in the target entity in May 2019 for R$ 4,200. Included in the original purchase agreement, Arco agreed to acquire 100% of Nave over the next three years in three tranches (subject to price adjustments, net of debt at each closing date). Pursuant to the investment and share purchase agreement for the acquisition of Nave, Arco purchased an additional 37.8% on October 29, 2019. The Company therefore owned 51% interest and concluded it had control and consolidated Nave as a majority owned subsidiary. The purchase consideration transferred was R$ 58,194, which is composed for R$ 21,098 paid at the acquisition date, R$ 29,728 regarding a forward contract that will be paid over the next 2 years and R$ 7,368 regarding a fair value of previously held interest in a step acquisition. At the date of acquisition, the carrying amount of the investment previously held interest was R$ 3,660, resulting in a gain in step acquisition of R$ 3,708. The price of the exercise of the option is variable and conditioned to the performance of the entity, the price of the option is based on a revenue multiple. The breakdown purchase consideration is as follows: At acquisition date Cash paid 21,098 Fair value of previously held investment 7,368 Fair value of forward contract 29,728 Consideration transferred 58,194 The Company did not recognize deferred taxes related to the business combination because the tax basis and the accounting basis, including fair value adjustments, were the same at the date of the business combination. Goodwill The goodwill acquired on the acquisition was R$ 37,557 and is expected to be deductible for tax purposes after the Company merges the acquiree. For the purpose of impairment testing, the goodwill has been allocated to the Supplemental operating segment. The goodwill recognized is primarily attributable to the expected synergies and other benefits from combining the assets and activities of Nave with those of the Company. The goodwill paid is based on the Business Plan prepared for purposes of the acquisition, and the principal business assumptions used were considered by the administration as appropriate. Transaction costs Transaction costs of R$ 467 were expensed and are included in general and administrative expenses on December 31, 2019. Measurement of fair value The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer relationship Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence. Educational system Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational system being owned. From the date of acquisition, Nave contributed with R$ 7,147 of net revenue and with R$ 3,379 of profit before income taxes for the year ended December 31, 2019 to the Company. If the combination had taken place at the beginning of the year ended December 31, 2019, net revenue would have been R$ 580,276 and loss before income taxes for the Company would have been R$ 44,603. (c) Sistema Positivo de Ensino (“Positivo”) On May 7, 2019, the Company announced that it entered into a definitive agreement to acquire Sistema Positivo de Ensino (Positivo), one of the largest K‑12 content providers to private schools in Brazil. The transaction was subject to customary closing conditions, including antitrust and other regulatory approvals in Brazil. After the final antitrust approval from Brazil’s Administrative Council for Economic Defense – CADE, which occurred on October 23, 2019, Arco concluded the transaction on November 1, 2019. Accordingly, in that date, the Company, through its subsidiary EAS, acquired control of Positivo. On November 1, 2019, the Company updated the amount of the contract by CDI from March 31 to October 31, 2019, to R$ 1,745,160. The 50% due on the closing date of the transaction, was reduced by restricted values (movements outside the normal course of business), corresponding to R$ 71,729. The acquisition has been approved by the Boards of Directors of both Arco and Positivo. The amount of R$ 800,851 was paid on the acquisition date, and net of the restricted values, this amount corresponds to 50% of the purchase. The remaining 50% will be paid over 5 years, 20% payable in 2021 and 2022, and 30% payable in 2023 and 2024, all adjusted by the Brazilian Interbank Certificate of Deposit rate (CDI). To guarantee the remaining debt, the Company signed a guarantee letter with Bradesco bank. The Company did not recognize deferred taxes related to business combination because the tax basis and the accounting basis, including fair value adjustments, were the same at the acquisition date. Goodwill The goodwill recorded on the acquisition was R$ 830,028 and it is expected to be deductible for tax purposes after the Company merges the acquiree. For the purpose of impairment testing, the goodwill has been allocated to the Core operating segment regarding operations of educational content and to the Supplemental operating segment for the activities from Positvo English School, the bilingual content. The goodwill recognized is primarily attributable to the expected synergies and other benefits from combining the assets and activities of Positivo with those of the Company. The goodwill paid is based on the Business Plan prepared for purposes of the acquisition, and the principal business assumptions used were considered by the administration as appropriate. Transaction costs Transaction costs of R$ 27,389 were expensed and are included in general and administrative expenses on December 31, 2019. Measurement of fair value The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer relationship Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence. Educational system Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational system being owned. Educational platform Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational platform being owned. From the date of acquisition, Positivo contributed with R$ 80,100 of net revenue and with R$ 25,641 of profit before income taxes for the year ended December 31, 2019 to the Company. If the combination had taken place at the beginning of the year ended December 31, 2019, net revenue would have been R$ 884,504 and profit before income taxes for the Company would have been R$ 78,128. (d) NS Educação Ltda. (“NS Educação”) On September 28, 2017, the Company acquired control of NS Educação Ltda. (“NS Educação”) by acquiring 100% of its shares. NS Educação is a private company which sells educational content under the trademark “Universitário”. NS Educação is a content provider to middle class private schools in Brazil and represented an opportunity for the Company to achieve a greater scale and improve its margin. The purchase consideration transferred amounted to R$ 38,534, comprised of cash consideration in the amount of R$ 29,037, which was paid on the date of acquisition and a deferred payment in the amount of R$ 7,302, which has been retained in an escrow account for the period of 5 years as a guarantee for the payment of any contingent liabilities that may arise. Any remaining balance will be transferred to the former owners of the acquired entity. The amount will be released in annual installments adjusted by the interest from Interbank certificates of deposit (“CDI”). The equivalent of 5% of the original purchase price was determined as an “acquisition price adjustment”, which was calculated based on the difference between the revenue from 2017 less the projected revenue for that year multiplied by 2.50. The purchase price adjustment totaled R$ 2,195. Goodwill Goodwill recorded on the acquisition is R$ 28,826 and it is expected to be deductible for tax purposes after the Company merges the acquiree. For the purpose of impairment testing, goodwill has been allocated to the Core operating segment. Transaction costs Transaction costs of R$ 498 were expensed and are included in general and administrative expenses for the year ended December 31, 2017. Measurement of fair value The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer list Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Educational system Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by educational system, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence. From the date of acquisition, NS Educação had no revenue due to the implementation process and seasonality and contributed with a loss before income taxes of R$ 1,050 for the year ended December 31, 2017. If the acquisition had taken place at the beginning of the year December 31, 2017, net revenue of the Company would have been R$ 258,848 and profit before income taxes for the Company would have been R$ 70,357. (e) International School Serviços de Ensino, Treinamento e Editoração, Franqueadora S.A. (“International School”) International School represented an opportunity for the Company to enter the English as a second language and bilingual teaching market. The acquisition is intended purpose to provide additional value-added content to the Company’s customers. International School has a proprietary English content solution developed for in-school programs for private schools and a professional staff that is highly qualified to develop the product and provide support to International School’s customers. On December 21, 2015, the Company acquired 40% of the outstanding voting shares of International School for an amount of R$ 12,300. At that date, the Company entered into an agreement through which it had a call and the sellers had a put to acquire the remaining 60% of the seller’s shares. The price would be calculated using a multiple of 10x EBITDA related to the year ending December 31, 2019 and the call and put options would be exercised between January 1, 2020 and April 30, 2020. The put and call was considered symmetrical but did not give the control over the remaining shares. The Company did not have at that time (i) power over the investee; (ii) exposure, or rights, to variable returns from its involvement with the investee; (iii) the ability to use its power over the investee to affect the amount of the investor’s returns. In addition, the contract agreement established that the Company would only have control over the remaining 60% shares when the option was exercised. Therefore, the Company did not consolidate the investment in International School and the put and call was accounted as a forward contract marked at fair value. As of December 31, 2016, the investment was accounted for as an equity method investment and a goodwill of R$4,200 was recorded as part the investment. On January 23, 2017, the Company acquired an additional 11.48% interest in International School, through the capitalization of advances for future capital increases amounting to R$ 5,300, that the Company paid in cash in 2016. This resulted in the dilution of the other shareholders and increasing its ownership from 40% to 51.48% and in obtaining control of International School. The financial statements of International School were consolidated from the date the Company acquired control and the acquisition was accounted for as a business combination. On January 23, 2017, upon acquiring control of International School, the Company and the former controlling shareholder agreed to amend the exercise dates of the call and put options originally issued in 2015. In accordance with the investment agreement, as amended, the shareholders agreed that the put and call options on the 25% of the remaining interest held by the non-controlling shareholders would be exercised in the period between January 1, 2020 and April 30, 2020 and the International School audit report released up to March 31, 2020. The put and call on the remaining 23.52% would be exercised in the period between January 1, 2021 and April 30, 2021. Additionally, the exercise price and purchase mechanics were also amended as follows: i) The exercise price for the 25% interest was determined to be 30% x 10 x EBITDA for the 2019 school year (that comprises the twelve-month period between October and September), discounting any debts, cash and the difference of the capital contribution made in the acquisition amount and also the amount that should have been contributed by the selling shareholder at the time of the acquiree’s capital increase (equivalent to R$ 3,180); and ii) The exercise price for the remaining 23.52% was determined to be 30% x 10 x EBITDA for the 2020 school year discounting any debts and cash values; and iii) Anticipation of the purchase mechanics in case of an initial public offering of EAS. The terms of the options were assessed to determine whether or not they expose the Company to the risks and rewards associated with the actual ownership of such shares during the period of the option contract. Because the terms of the put and call options are symmetrical, the Company concluded that it is virtually certain that either the Company or the non-controlling shareholder would exercise the option because it will be in the economic interests of one of them to do so. The Company accounted for the call and put options under the anticipated-acquisition method, and the non-controlling interest subject to the put or call options is deemed to have been acquired at the date of acquisition of the control. Accordingly, upon obtaining control, the Company also consolidated the interest currently legally held by the non-controlling shareholder and recognized a financial liability that would be eventually settled when the put or call option is exercised. The financial liability was recorded at the present value of the estimated amount payable to the non-controlling shareholder upon the exercise of the put or call options and discounted to present value using an estimated interest rate of 21.0%. See note 28 for more information regarding the acquisition of the remaining share interest in International School. Goodwill A business combination achieved in stages is accounted for using the acquisition method at the acquisition date. Goodwill is calculated at the date when control is acquired. To calculate goodwill, the previously held interest was remeasured to fair value at the acquisition date, and a gain was recognized in the statement of income in other operating income (expense) for an amount of R$ 1,184 at that date. The fair value of the previously held interest then forms one of the components that is used to calculate goodwill, along with consideration and non-controlling interest, less the fair value of identifiable net assets. The purchase consideration transferred totaled R$ 67,510, which breakdown is as follows: At acquisition date Capitalization of advances for future capital increases 5,300 Fair value of previously held investment 32,066 Fair value of forward contract 30,144 Consideration transferred 67,510 The table below demonstrates the calculation of goodwill: At acquisition date Cash consideration and fair value of the forward contract 35,444 Fair value of previously held investment 32,066 Fair value of identified assets acquired and liabilities assumed (39,912) Goodwill 27,598 Goodwill arising on this acquisition is not expected to be deductible for tax purposes. For the purpose of impairment testing, goodwill has been allocated to the Supplemental operating segment. Transactions costs Transaction costs of R$ 85 were expensed and are included in general and administrative expenses for the year ended December 31, 2017. Measurement of fair value As of the acquisition date, the fair value of trade receivables acquired equals its carrying amount. The valuation techniques used for measuring the fair value of separately identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer list Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Educational system Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by educational system, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. From the date of acquisition, International School contributed with R$ 25,382 of net revenue and with R$ 7,465 of profit before income taxes for the year ended December 31, 2017 to the Company. If the acquisition had taken place at the beginning of the year ended December 31, 2017, net revenue would have been R$ 244,426 and profit before income taxes for the Company would have been R$ 67,024. See Note 28 for further information.

Cash and cash equivalents

Cash and cash equivalents	12 Months Ended
	Dec. 31, 2019
Cash and cash equivalents.
Cash and cash equivalents	5 Cash and cash equivalents 2019 2018 Cash and bank deposits 2,838 366 Cash equivalents and bank deposits in foreign currency (a) 23,346 3,615 Cash equivalents (b) 22,716 8,320 48,900 12,301 (a) Short-term deposits (mainly follow-on proceeds) maintained in U.S. dollar. (b) Cash equivalents correspond to financial investments in Bank Certificates of Deposit (“CDB”) of highly rated financial institutions. As of December 31, 2019, the average interest on these CDB are equivalent to 30.0% (2018: 61.7%) of the Interbank Certificates of Deposit (“CDI”). These funds are available for immediate use and have insignificant risk of changes in value.

Financial investments

Financial investments	12 Months Ended
	Dec. 31, 2019
Financial investments.
Financial investments	6 Financial investments 2019 2018 Financial investments (a) 577,398 810,812 Financial investments in foreign currency 1,629 — Other 467 347 579,494 811,159 Current 574,804 806,789 Non-current 4,690 4,370 (a) Financial investments correspond to investments in non-exclusive funds managed by highly rated financial institutions. As of December 31, 2019, the average interest on these funds are equivalent to 99.86% (2018: 100.9%) of the CDI. The average CDI rate during the nine-month period was 0.48% per month.

Trade receivables

Trade receivables	12 Months Ended
	Dec. 31, 2019
Trade receivables.
Trade receivables	7 Trade receivables 2019 2018 From sales of educational content 354,968 146,114 From related parties (Note 10) 4,511 3,916 359,479 150,030 (-) Allowance for doubtful accounts (30,051) (13,419) 329,428 136,611 As of December 31, 2019, and 2018, the aging of trade receivables was as follows: 2019 2018 Neither past due nor impaired 299,159 127,387 Past due 60,320 22,643 1 to 60 days 18,931 8,931 61 to 90 days 6,865 3,868 91 to 120 days 6,414 1,978 121 to 180 days 9,904 3,173 More than 180 days 18,206 4,693 359,479 150,030 The movement in the allowance for doubtful accounts for the years ended December 31, 2019 and 2018, was as follows: 2019 2018 2017 Balance at beginning of the year (13,419) (10,290) (5,386) Change in accounting policy – IFRS 9 — — (5,757) Additions (17,392) (9,588) (5,227) Receivables written off during the period as uncollectible 760 6,459 6,080 Balance at end of year (30,051) (13,419) (10,290)

Inventories

Inventories	12 Months Ended
	Dec. 31, 2019
Inventories
Inventories	8 Inventories 2019 2018 Educational content 24,535 8,335 Educational content in progress (a) 12,837 6,205 Consumables and supplies 835 286 Inventories held by third parties 1,899 305 40,106 15,131 (a) Costs being incurred to develop educational content. These costs include incurred personnel costs and third parties’ services for editing educational content and related activities (graphic design, editing, proofreading and layout, among others). Educational content is presented net of inventory reserve. The movement in the inventory reserve for the years ended December 31, 2019, 2018 and 2017 was as follows: 2019 2018 2017 Balance at beginning of the year (4,403) (2,047) (1,073) Inventory reserve (8,476) (7,252) (4,481) Write-off of inventories against reserve 6,362 4,896 3,507 Balance at end of year (6,517) (4,403) (2,047)

Recoverable taxes

Recoverable taxes	12 Months Ended
	Dec. 31, 2019
Recoverable taxes
Recoverable taxes	9 Recoverable taxes 2019 2018 Withholding Income Tax (IRRF) on financial investments (a) 637 5,291 Recoverable IRPJ and CSLL 17,456 5,520 Recoverable PIS and COFINS 2,501 1,223 Other recoverable taxes 1,631 226 22,225 12,260 Current 15,612 11,227 Non-current 6,613 1,033 (a) Withholding income tax (IRRF) will be utilized to offset federal taxes payable.

Related parties

Related parties	12 Months Ended
	Dec. 31, 2019
Related parties
Related parties	10 Related parties The table below summarizes the balances and transactions with related parties: 2019 2018 Assets Trade receivables Livraria ASC Ltda. and Educadora ASC Ltda. (a) 4,511 3,916 4,511 3,916 Other assets General Atlantic Arco (Bermuda), L.P. (b) 4,109 — 4,109 — Loans to related parties WPensar S.A. (c) 1,298 1,226 Loans - Geekie (d) 4,231 — Debentures – Geekie (d) 10,582 — 16,111 1,226 Current 1,298 — Non-current 14,813 1,226 Advances from customers Livraria ASC Ltda. and Educadora ASC Ltda. (a) (1) — (1) — 2019 2018 2017 Net revenue Livraria ASC Ltda. and Educadora ASC Ltda. (a) 8,805 8,234 8,895 Expenses ASC Empreendimentos Ltda. and OSC Empreendimentos Ltda. (e) (8) (13) (21) Finance income WPensar S.A. (c) 72 — — Geekie (d) 813 — — 885 — — (a) Arco Ventures S. A. and International School sell educational content to Livraria ASC Ltda. and Educadora ASC Ltda., entities under common control of the Company’s controlling shareholders. The transactions are priced based on contract price at the sales date. The price applied is equivalent to that practiced in the market, being competitive transactions. (b) The amount refers to underwriting discounts and commissions incurred for issuing shares with the follow-on public of Class A shares of the selling shareholder GA, as described in Note 1. (c) The amounts receivable from WPensar S.A. are related to loan agreements and are indexed to the Brazilian Sistema Especial de Liquidação e Custódia (SELIC) interest rate and have a due date in July 2020. During 2019, the Company recognized R$ 72 of interest income. (d) On January 17, 2019, the Company entered into an agreement with its associated company, Geekie Desenvolvimento de Softwares S.A. (“Geekie”) buying 100,000 debentures issued at same date at par value of R$ 100.00 (hundred reais) each, totaling R$ 10,000. During 2019, the Company recognized R$ 582 of interest income. The debentures are due in June 2022 and bear interest of 110% of the CDI. The debentures are convertible in shares at the option of Arco at maturity similar to same terms of the call and put options presented in the investment agreement. On the same date, the Company lent R$ 4,000 to Geekie Partners S.A., the controlling shareholder of Geekie, through a loan agreement with payment due in June 2022, interest of 110% of the CDI, and with their entire interest on Geekie’s shares as collateral to the transaction. During 2019, the Company recognized R$ 231 of interest income. The transactions totaled R$ 14,000 and are intended to support Geekie’s working capital needs. (e) Arco Ventures S.A. leases a facility from OSC Empreendimentos Ltda., which are entities under common control of the Company’s controlling shareholder. The agreement was terminated in February 2020. Key management personnel compensation Key management personnel compensation comprised the following: 2019 2018 2017 Short-term employee benefits 13,732 9,436 5,321 Stock options — 59,747 1,359 Restricted stock units 66,429 — — 80,161 69,183 6,680 Compensation of the Company’s key management includes short-term employee benefits comprised by salaries, bonuses, labor and social charges, and other ordinary short-term employee benefits. Certain executive officers also participate in the Company’s share-based compensation plan (Note 18b).

Investments and interests in ot

Investments and interests in other entities	12 Months Ended
	Dec. 31, 2019
Investments and interests in other entities.
Investments and interests in other entities	11 Investments and interests in other entities (a) Investments WPensar S.A. (“WPensar”) In April 2015, the Company acquired a 25% interest of WPensar, a company engaged in the development and licensing of software, specifically, school management systems. The Company executed a shareholders’ agreement to share control of WPensar with the other shareholders, recognizing this investment as a joint venture. This investment helped the Company to identify new potential businesses, to enhance its overall growth strategy and to create synergies. This investment is not a business combination since the Company did not acquire control of WPensar. In addition, the Company has a call option to acquire the remaining 75% interest in WPensar with an exercise period beginning on July 10, 2020 through July 10, 2021. In addition, the other shareholders have a put option to sell their interest of 75% with an exercise period beginning on July 10, 2021 through July 10, 2022. The exercise price for the put and call options is calculated by the average of the last three months of the EBITDA multiple that Arco’s stock is being traded, less net debt. If the Company exercises the call option, the settlement can be performed up to 50% in shares of EAS. The call and put options were recorded at their fair value, calculated through the multiple scenarios method – Monte Carlo. Any adjustment to the fair value is recognized as finance income/costs in the statement of income (loss). The Company paid an acquisition price of R$ 5,000 for the interest in WPensar, of which R$ 4,777 refers to the consideration transferred as capital contribution and R$ 223 to the initial recognition of the above said asymmetrical put and call options instrument. Geekie Desenvolvimento de Softwares S.A. (“Geekie”) In December 2016, the Company acquired a 6.54% interest in Geekie, an entity that provides technology for adaptive assessment and learning products and engages in the production, development and licensing of software tailored to the specific requirements of education sector customers. Based on the agreement signed by Geekie’s shareholders, the Company exercises significant influence over the investment, as the Company: (i) has representation on the board of directors; (ii) participates on strategic decision making regarding all relevant matters; (iii) must approve all products launched by Geekie; and (iv) provides essential technical information (Geekie’s products are based on the Company’s educational content). The agreed amount of R$ 8,000 was paid in January 2017, of which R$ 4,000 was a capital contribution and R$ 4,000 was paid to the selling shareholders. The Company agreed with the selling shareholders that if in June 2018 the cash and cash equivalents of Geekie are lower than a threshold of R$ 5,000, the Company will have to subscribe capital in the amount of R$ 2,000. On July 2, 2018, the extraordinary shareholders’ meeting authorized the acquisition of additional 1.51% interest in the equity of Geekie, increasing the Company’s share from 6.54% to 8.05% through a capital increase of R$ 2,000. The capital increase was fully paid on July 3, 2018. The additional investment did not change the Company’s influence in Geekie and had the purpose to support its working capital needs. On September 20, 2019, Arco acquired acquired 0.96% of interest in the share capital of Geekie through a capital increase of R$1,218 increasing our total interest to 9.01%. On October 14, 2019, Arco acquired an additional 1.92% interest in the share capital of Geekie through a capital increase of R$2,500 increasing our total interest to 10.92%. In addition, on October 25, 2019, Arco acquired an additional 18.44% interest in the share capital of Geekie from a minority shareholder for R$21,892 increasing our total interest to 29.36%. On November 15, 2019, Arco acquired an additional 1.17% interest in the share capital of Geekie through a capital increase of R$2,000 increasing our total interest to 30.53%. In December 2019, Arco acquired an additional 7.00% interest in the share capital of Geekie through a capital increase of R$ 4,282 and the purchase of minority shareholders for R$ 5,761 increasing its total interest to 37.53% as of December 31, 2019. In addition, the Company has a call option to acquire the remaining 62.47% in Geekie that can be exercised in the period beginning on May 1, 2022, through May 31, 2022. The selling shareholders have a put option to sell their 62.47% interest in Geekie that can be exercised during the same period. The exercise price is determined by the greater of: · The multiple of the Company’s EBITDA for 2021 multiplied by Geekie’s EBITDA, including any cash or debt; or · 10 times Geekie´s EBITDA for 2021, less net debt. If the Company decides to exercise the option to acquire the remaining interest, the settlement may be performed in up to 50% in shares of EAS. The call and put options were recorded at fair value, calculated through the multiple scenarios method – Monte Carlo. Any adjustment to the fair value is recognized as finance income (costs) in the statement of income (loss). (i) Investments and interests in other entities Reconciliation of carrying amount: 2019 2018 WPensar Geekie Nave Total Total At beginning of the period 3,237 8,625 — 11,862 12,654 Capital contributions — 10,000 4,200 14,200 — Acquisition from a minority shareholder — 27,653 — 27,653 — Gain of changes in ownership — 319 — 319 — Share of loss of equity-accounted investees (188) (1,072) (540) (1,800) (792) Consolidation on the acquisition of control — — (3,660) (3,660) — At end of the period 3,049 45,525 — 48,574 11,862 Percentage of ownership 25.0 % 37.5 % 51.0 % (ii) Selected financial information for associates and joint ventures Geekie WPensar December 31, 2019 Current assets 8,444 1,619 Non-current assets 17,983 1,687 Current liabilities 5,042 268 Non-current liabilities 10,964 1,240 Equity 10,421 1,798 Net revenue 14,266 4,200 Costs and expenses (*) (25,848) (3,985) Profit (loss) for the year (11,582) 215 December 31, 2018 Current assets 5,215 1,625 Non-current assets 12,174 1,414 Current liabilities 7,681 286 Non-current liabilities — 1,170 Equity 9,708 1,583 Net revenue 11,084 3,965 Costs and expenses (*) (18,299) (4,015) Loss for the year (7,215) (50) December 31, 2017 Current assets 8,937 1,615 Non-current assets 11,503 1,394 Current liabilities 5,276 284 Non-current liabilities — 1,091 Equity 15,164 1,634 Net revenue 14,329 3,687 Costs and expenses (*) (15,865) (3,598) Profit (loss) for the year (1,536) 89 (*) Comprise costs, selling and administrative expenses, finance result, other expenses and income tax and social contribution.

Property and equipment

Property and equipment	12 Months Ended
	Dec. 31, 2019
Property and equipment
Property and equipment	12 Property and equipment Reconciliation of carrying amount: Machinery Furniture and and IT Leasehold equipment Vehicles fixtures equipment Facilities improvements Others Total Cost As of December 31, 2017 843 191 1,758 3,047 313 4,387 2,387 12,926 Additions 87 — 589 2,096 12 258 3,812 6,854 Disposals (34) — (51) (63) — (7) — (155) As of December 31, 2018 896 191 2,296 5,080 325 4,638 6,199 19,625 Additions 215 — 636 2,529 45 4,663 2,903 10,991 Disposals (17) (70) (895) (3,061) (290) (184) (1,076) (5,593) Business combination 213 — 517 2,775 — 1,627 — 5,132 Sale of Escola de Aplicação São José dos Campos Ltda. (50) — (201) (51) — (710) — (1,012) Write-offs — — — — — — (792) (792) As of December 31, 2019 1,257 121 2,353 7,272 80 10,034 7,234 28,351 Depreciation As of December 31, 2017 (170) (120) (324) (1,187) (65) (790) (1,191) (3,847) Depreciation charge for the year (84) (24) (203) (740) (35) (484) (878) (2,448) Disposals — — — 17 — — — 17 As of December 31, 2018 (254) (144) (527) (1,910) (100) (1,274) (2,069) (6,278) Depreciation charge for the period (91) (24) (254) (1,211) (34) (1,161) (1,580) (4,355) Depreciation of disposals 114 68 368 1,709 108 60 972 3,399 Sale of Escola de Aplicação São José dos Campos Ltda. 10 — 34 17 — 150 — 211 As of December 31, 2019 (221) (100) (379) (1,395) (26) (2,225) (2,677) (7,023) Net book value As of December 31, 2018 642 47 1,769 3,170 225 3,364 4,130 13,347 As of December 31, 2019 1,036 21 1,974 5,877 54 7,809 4,557 21,328 The Company assesses, at each reporting date, whether there is an indication that a property and equipment asset may be impaired. If any indication exists, the Company estimates the asset’s recoverable amount. There were no indications of impairment of property and equipment as of and for the years ended December 31, 2019, 2018 and 2017.

Leases

Leases	12 Months Ended
	Dec. 31, 2019
Leases
Leases	13 Leases The balance sheet shows the following amounts relating to leases: 2019 Right-of-use assets Properties 21,518 Machinery and equipment 113 21,631 2019 Lease liabilities * Current 6,845 Non-current 19,012 25,857 * For the adjustments recognized on adoption of IFRS 16 on January 1, 2019, see Note 2.5. Set out below, are the carrying amounts of the Company’s right-of-use assets and lease liabilities and the movements during the period: Right-of-use assets – Lease Properties Liabilities As at January 1, 2019 18,225 (20,089) Additions 4,502 (4,502) Lease modification (338) 338 Depreciation expense (5,999) — Business combination 5,241 (5,374) Interest expense — (1,489) Payments of lease liabilities — 4,407 Interest paid — 852 As at December 31, 2019 21,631 (25,857) Average annual depreciation rate 23.7 % The Company recognized rent expense from short-term leases and low-value assets of R$ 2,613 for the year period ended December 31, 2019.

Intangible assets and goodwill

Intangible assets and goodwill	12 Months Ended
	Dec. 31, 2019
Intangible assets and goodwill.
Intangible assets and goodwill	14 Intangible assets and goodwill Rights on Customer Educational Software Educational Non-compete Goodwill contracts relationships system Copyrights license Trademarks platform agreement In Progress Total Cost As of December 31, 2017 89,634 15,263 23,045 36,656 4,948 1,393 19,115 3,942 1,097 — 195,093 Acquisitions — — — — 7,744 1,415 62 17,969 — 2,213 29,403 As of December 31, 2018 89,634 15,263 23,045 36,656 12,692 2,808 19,177 21,911 1,097 2,213 224,496 Corporate restructuring (Note 2.2) (53,521) — — — — — — — — — (53,521) Acquisitions — — — — 8,377 4,441 — 23,634 309 6,341 43,102 Disposals — — — — — — — (1,841) — — (1,841) Acquisitions through business combinations 880,654 — 183,926 214,567 — 11,163 336,121 24,728 6,897 20,607 1,678,663 Transfer — — — — — — — 19,555 — (19,555) — As of December 31, 2019 916,767 15,263 206,971 251,223 21,069 18,412 355,298 87,987 8,303 9,606 1,890,899 Amortization As of December 31, 2017 — (2,767) (4,924) (6,127) (1,321) (273) (2,670) (1,473) (55) — (19,610) Amortization — (1,182) (2,636) (6,589) (2,618) (375) (1,140) (2,387) (219) — (17,146) As of December 31, 2018 — (3,949) (7,560) (12,716) (3,939) (648) (3,810) (3,860) (274) — (36,756) Amortization — (1,342) (6,450) (9,518) (7,743) (2,307) (4,431) (10,449) (536) — (42,776) Amortization of disposals — — — — — — — 536 — — 536 As of December 31, 2019 — (5,291) (14,010) (22,234) (11,682) (2,955) (8,241) (13,773) (810) — (78,996) Net book value As of December 31, 2018 89,634 11,314 15,485 23,940 8,753 2,160 15,367 18,051 823 2,213 187,740 As of December 31, 2019 916,767 9,972 192,961 228,989 9,387 15,457 347,057 74,214 7,493 9,606 1,811,903 (a) Goodwill The carrying amount of goodwill by operating segment was: 2019 2018 Core 755,539 62,036 Supplemental 161,228 27,598 916,767 89,634 Impairment test for goodwill The Company performed its annual impairment test on December 31, 2019 and 2018. The Company tests at least annually the recoverability of the carrying amount of each operating segment. The process of estimating these values involves the use of assumptions, judgments and estimates of future cash flows that represent the Company’s best estimate. Goodwill is monitored by management at the level of cash generating unit, which is the same of the two operating segments. The Core and Supplemental operating segments had an important cash flow improvement as they have increased their number of students and achieved greater scale that positively impact the gross margin. The Company’s management estimates future gross margin based on past performance and its expectations of market developments. The discount rates used are pre-tax and reflect the specific risks associated with the segment being tested. The value-in-use calculation is based on cash flow projections and financial budgets approved by management for a period of five years. Cash flows beyond the five-year period were extrapolated using an estimated growth rate. The growth rate does not exceed the average long-term rate for the industry. The value -in-use of the Core operating segment calculated for 2019 was R$ 2,130,003 (R$ 721,271 in 2018), and the carrying amount was R$ 1,846,915. The value -in-use of the Supplemental operating segment for 2019 was R$ 854,855 (R$ 195,023 in 2018), and the carrying amount was R$ 34,889. The value -in-use calculations were based on the discounted cash flow model and are based on the following assumptions for those segments: Budget period Growth rate beyond budget Gross margin Growth rate period Discount rate 2019 2018 2019 2018 2019 2018 2019 2018 Core 76.7 % 78.8 % 11.1 % 21.1 % 4.3 % 4.0 % 12.7 % 15.7 % Supplemental 81.0 % 87.4 % 18.3 % 33.0 % 4.3 % 4.0 % 14.5 % 17.6 % Significant estimate: impact of possible changes in key assumptions A decrease of 120 basis points in management estimated gross margin used in the value-in-use calculation for the Core operating segment as of December 31, 2019 (75.5% instead of 76.7%), would have not resulted in the recognition of an impairment of goodwill. Also, the Company performed the same sensitivity analysis for the Supplemental operating segment (79.8% instead of 81.0%) and concluded it would have not resulted in the recognition of an impairment of goodwill. In addition, an increase of 120 basis points in management’s estimated discount rate applied to the cash flow projections of the Core operating segment for the year ended December 31, 2019 (13.8% instead of 12.7%), would have not resulted in the recognition of an impairment of goodwill. Also, the Company performed the same sensitivity analysis for the Supplemental operating segment (15.7% instead of 14.5%) and concluded it would have not resulted in the recognition of an impairment of goodwill. There was no goodwill impairment for the years ended December 31, 2019, 2018 and 2017. (b) Other intangible assets Intangible assets, other than goodwill, are valued separately for each acquisition and are amortized during each useful life. The useful lives and methods of amortization of other intangibles are reviewed at each financial year end and adjusted prospectively, if appropriate. The estimated useful lives of intangible assets for the years ended December 31, 2019, 2018 and 2017 are as follows: Years Rights on contracts 10 Customer relationships 5 to 16 Educational system 3 to 10 Copyrights 3 Software license 2 a 5 Trademarks 10 to 20 Educational platform 3 a 10 Non-compete agreement 2 a 5 For the years ended December 31, 2019, 2018 and 2017 there were no indicators that the Company’s intangible assets with definite lives might be impaired.

Loans and financing

Loans and financing	12 Months Ended
	Dec. 31, 2019
Loans and financing
Loans and financing	15 Loans and financing Interest rate Maturity 2019 Bank loan 100% CDI + 0.7% pa October/2020 98,561 On October 25, 2019, the Company entered into a loan agreement in the amount of R$ 100,000, maturing in October 2020 (single installment), classified as short-term on the consolidated balance sheet. The loan is secured by guarantee letter. Set out below the movements during the period: 2019 Balance at beginning of the year — Additions 100,000 Business combination 548 Loan cost (2,426) Interest expense 1,002 Payment of loans and financing (563) Balance at end of year 98,561

Financial instruments from acqu

Financial instruments from acquisition of interests	12 Months Ended
	Dec. 31, 2019
Financial instruments from acquisition of interests.
Financial instruments from acquisition of interests	16 Financial instruments from acquisition of interests The breakdown of contingent consideration assets and liabilities and related derivative instruments from business combinations and acquisition of investments in associates and joint ventures is as follows: 2019 2018 Assets Derivative financial instruments Investment in Geekie (Note 11) 32,152 23,346 Investment in WPensar (Note 11) 3,794 3,284 35,946 26,630 Current 3,794 — Non-current 32,152 26,630 2019 2018 Liabilities Derivative financial instruments Investment in Geekie (Note 11) (31,626) (22,037) Investment in WPensar (Note 11) (2,314) (3,006) Deferred revenue in Escola de Aplicação São José dos Campos — (54) (33,940) (25,097) Current — (51) Non-current (33,940) (25,046)

Accounts payable to selling sha

Accounts payable to selling shareholders	12 Months Ended
	Dec. 31, 2019
Accounts payable to selling shareholders
Accounts payable to selling shareholders	17 Accounts payable to selling shareholders The breakdown of the liabilities regarding balances of accounts payable from business combination and investments in associates is as follows: 2019 2018 Accounts payable to selling shareholders Acquisition of International School (a) (297,722) (174,410) Acquisition of NS Educação Ltda. (b) (6,461) (6,971) Acquisition of Escola em Movimento (c) (1,992) — Acquisition of Nave à Vela (d) (30,946) — Acquisition of Positivo (e) (879,111) — (1,216,232) (181,381) Current (117,959) (830) Non-current (1,098,273) (180,551) (a) The financial liability is recorded at the present value of the estimated amount payable to the non-controlling shareholder upon the exercise of the put or call options and discounted to present value using an estimated interest rate of 14.5% (17.6% in 2018). During 2019 the Company recognized R$ 33,909 of interest. The amount payable is estimated based on projected EBITDA for the 2019 and 2020 school year. During the fourth quarter of 2019, the Company had a better visibility about next year´s ACV bookings and its increase, it was necessary to perform a review on previous operations projections, that resulted in an increase on the projected EBITDA. Based on the new projected numbers for 2019 and 2020, the accounts payable increased by R$89,403. See Note 28 for more information. (b) This amount was retained for any losses, which will be released in annual installments until December 31, 2022. The amount is being adjusted by the interest from Interbank certificates of deposit (CDI). (c) This amount was retained for any losses, which will be released in two annual installments on the first and second anniversary of the acquisition. The amount is being adjusted by the basic interest rate (SELIC). (d) This amount is related to the remaining acquisition of 49% interest in Nave and will occur over the next two years (subject to price adjustments, net of debt at each closing date). This amount is recorded at the present value using an estimated interest rate of 14.54%. During 2019, the Company recognized R$ 1,218 of interest. The next tranche is payable on February 15, 2021, in this date Arco Ventures S.A. will acquire 24% interest, for the 24% of Nave’s revenues from October 1, 2019 to September 30, 2020 multiplied by 5.3, net of debt. The last tranche is payable on February 15, 2022, in this date Arco Ventures S.A. will acquire 25% interest, for 25% of Nave’s revenues from October 1, 2020 to September 30, 2021 multiplied by 3, net of debt. (e) The amount of the contract is updated by CDI from November 1, 2019 to December 31, 2019.

Labor and social obligations

Labor and social obligations	12 Months Ended
	Dec. 31, 2019
Labor and Social Obligations
Labor and social obligations	18 Labor and social obligations 2019 2018 Bonuses 28,045 2,897 Payroll and social charges 17,763 4,519 Payroll accruals 18,998 6,597 Other labor 6,506 1,875 71,312 15,888 Current 68,511 15,888 Non-current 2,801 — (a) Variable remuneration (bonuses) The Company recorded bonuses related to variable remuneration of employees and management in cost of sales, selling and administrative expenses in the amount of R$ 14,519, R$ 4,224 and R$ 850 for the years ended December 31, 2019, 2018, and 2017, respectively. (b) Share-based compensation plan Arco plan Members of the Company’s management participated in the EAS share-based compensation plan. In 2019, all directors exercised their stock options. As of December 31, 2019, there were no outstanding share options (December 31, 2018: 1,091,039). There was no share-based compensation expense as of December 31, 2019. The following table list the inputs to the model used for the Arco plan: Dividend yield (%) 2.41 Expected volatility (%) 186.61 Risk-free interest rate (%) 8.01 Expected life of share options (years) 6.00 Weighted average share price (R$) 12.67 Model used Black & Scholes The following table illustrates the number and movements of share options during the period: Average exercise Number of price per share share options option Outstanding at December 31, 2018 1,091,039 12.56 Exercised (1,091,039) 12.68 Outstanding at December 31, 2019 — — International School plan International School has its own share options plan, approved by its shareholders on August 4, 2017. International School granted 294,735 share options on its own shares in 2017 to selected key executives. The share options plan was designed to attract and retain key executives. The fair value of the share options was estimated at the grant date using the Black & Scholes pricing model, considering the terms and conditions on which the share options were granted. The share options vest on January 1, 2020 and can be exercised from January 1, 2020 through April 30, 2020. The exercise price of the share options is R$1.37 and is adjusted by the Brazilian General Price Index-Market (“IGP-M”) inflation rate. The Company accounts for the International School Plan as an equity-settled plan. There were no share options granted, forfeited, exercised and expired in the year ended December 31, 2019 and 2018. The compensation expense recognized for the International School Plan in the statement of income (loss) for the years ended December 31, 2019 and 2018 was R$ 549 and R$ 550, respectively. The following table details the assumptions used to determine the fair value of the share options under the International School share option plans: Date of grant 08/04/2017 Dividend yield (%) 0.00 % Expected volatility (%) 380.36 % Risk-free interest rate (%) 8.62 % Expected life of share options (years) 2.74 Weighted average share price (reais) on the grant date 10.65 Model used Black & Scholes Restricted stock units In 2019 the Company issued a new share-based payment program called restricted stock units (“RSU”) of the holding company Arco Platfom Limited for employees registered with EAS Educação, which will be available for sale by the beneficiaries annually, on their anniversary dates. The related compensation expense will be recognized over according to the following schedule. The restricted stock plan contemplates the issue of approximately 583,775 shares to be distributed to 24 beneficiaries. Final vesting Quantity of date stocks 28/09/2019 193,563 30/06/2020 3,086 28/09/2020 193,563 28/09/2021 193,563 Total 583,775 The participant's right to effectively receive ownership of the restricted shares will be conditioned to the participant's continuance as an employee, director or director of any company in the business group from the grant date until the grace periods (“Vesting”). If a participant leaves the group, it will be considered as non-compliance with the “vesting” condition, not being a cancellation of the plan but a “forfeiture”. After the vesting period, the restricted shares have the same rights and privileges as any shareholder. The following table reflects the movements from the grant date until December 31, 2019: Number of share options Outstanding at December 31, 2018 — Granted 583,775 Exercised (188,089) Effectively forfeited (36,913) Estimated forfeited (21,588) Outstanding at December 31, 2019 337,185 The total compensation expense for the year ended December 31, 2019, including taxes and social charges, was R$ 66,429, (R$ 32,494 of principal and R$ 33,935 of taxes and contributions) net of estimated forfeited. These awards are classified as equity settled. The fair value of these equity instruments was measured on the grant date as follows: Total shares Total shares Average fair value at Grant date granted outstanding grant date Average 30/04/2019 542,760 310,516 68,800 126.76 30/06/2019 1,543 1,450 274 177.71 30/06/2019 1,543 1,450 319 206.66 15/10/2019 37,929 23,769 7,593 200.18 Total 583,775 337,185 76,986 The grant date is the date on which the entity and the counterparty (including employee) entered into a share-based payment agreement, that is, when the entity and the counterparty have a shared understanding of the terms and conditions of the agreement.

Equity

Equity	12 Months Ended
	Dec. 31, 2019
Equity.
Equity	19 Equity a. Share capital On October 29, 2019, 257,442 Class B common shares were transferred to Class A shares without changing the total number of shares. As of December 31, 2019, Arco’s share capital is represented by 54,939,088 common shares (December 31, 2018: 50,261,027) of par value of US$ 0.00005 each, comprised by 27,400,848 Class B common shares (December 31, 2018: 27,658,290) and 27,538,240 Class A common shares (December 31, 2018: 22,602,737). In 2019, the directors exercised their stock options, resulting in a capital increase of R$13,830 and 1,091,039 of Class A common shares. December 31, 2018 shares outstanding 50,261,027 Share-based compensation plan (Note 18) 1,091,039 Restricted Stock Units (Note 18) 188,089 Restricted Stock Unit withheld (a) (51,723) Underwritten public offering of Class A common shares (Note 1) 3,450,656 December 31, 2019 shares outstanding 54,939,088 (a) A portion of the shares was withheld to pay income taxes of the beneficiaries. The Class B common shares are entitled to 10 votes per share and the Class A common shares, which are publicly traded, are entitled to one vote per share. The Class B common shares are convertible into an equivalent number of Class A common shares and generally convert into Class A common shares upon transfer subject to limited exceptions. The dual class structure will exist as long as the total number of issued and outstanding Class B common shares is at least 10% of the total number of shares outstanding. b. Capital reserve Capital reserve includes additional paid in capital amounts related to the difference between the subscription price that shareholders paid for the common shares and their nominal value. c. Dividends As determined by the Brazilian Corporate Law, Arco Brazil is required to pay a minimum dividend amounting to 25% of the profit of the year. Any amount in excess to 25% must be maintained in equity and after approval by the shareholders, the dividends can be considered formally declared. There was no distribution of dividends for the years ended December 31, 2019 and 2018, due to losses of the years. d. Tax benefit on tax deductible goodwill – reversion In 2018, the Company recorded an amount of R$ 46,314 regarding tax benefit generated from the goodwill in the acquisition of EAS interest by GA Holding. This amount was recorded based on the intention to merge the investee with the acquirer in accordance with current Brazilian law. In 2019, based on internal restructurings, management no longer intends to merge the entity under Brazilian law and therefore reversed the total amount previously recorded related to the tax deductibility of goodwill on business combination. Following the initial recognition of the tax credit, the amount was reversed directly against equity.

Earnings (loss) per share (EPS)

Earnings (loss) per share (EPS)	12 Months Ended
	Dec. 31, 2019
Earnings (loss) per share (EPS)
Earnings (loss) per share (EPS)	20 Earnings (loss) per share (EPS) Basic Basic EPS is calculated by dividing profit (loss) attributable to the equity holders of the parent by the weighted average number of Class A and Class B common shares outstanding during the period. Diluted Diluted EPS is calculated by dividing profit (loss) attributable to the equity holders of the parent by the weighted average number of Class A and Class B common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all potential common shares with dilutive effects. The following table reflects the profit (loss) attributable to equity holders of the parent and the share data used in the basic and diluted EPS computations: 2019 2018 2017 Class A Class B Total Class A Class B Total Class A Class B Total Profit (loss) attributable to equity holders of the parent (4,379) (5,052) (9,431) (37,047) (45,333) (82,380) 19,902 24,353 44,255 Weighted average number of common shares outstanding (thousand) 23,938 27,614 22,603 27,658 22,603 27,658 Effects of dilution from: Share-based compensation plan (thousands) 337 — 153 — 931 — Basic earnings (loss) per share - R$ (0.18) (0.18) (1.64) (1.64) 0.88 0.88 Diluted earnings (loss) per share - R$ (0.18) (0.18) (1.64) (1.64) 0.85 0.85 Diluted profit per share is calculated by the weighted average number of outstanding shares, in order to assume the conversion of all potential dilutive shares. Diluted earnings per share is calculated considering the instruments that may have a potential dilutive effect in the future, such as share-based payment instruments, using the treasury shares method when the effect is dilutive. However, due to the loss reported for the year ended December 31, 2019, these instruments issued have antidilutive effect and, therefore, were not considered in the weighted average number of outstanding shares for the computation of diluted loss per share.

Revenue

Revenue	12 Months Ended
	Dec. 31, 2019
Revenue
Revenue	21 Revenue The Company’s net revenue is as follows: 2019 2018 2017 Educational content 625,150 407,599 277,596 Other 2,820 4,102 2,385 Deductions Taxes (275) (264) (154) Returns and discounts (54,858) (30,456) (35,445) Net revenue 572,837 380,981 244,382 2019 2018 2017 Segments Core Supplemental Total Core Supplemental Total Core Supplemental Total Type of goods or service Educational content 432,663 137,516 570,179 299,203 77,940 377,143 216,661 25,425 242,086 Other 46 2,612 2,658 3,828 10 3,838 2,296 — 2,296 Total net revenue from contracts with customers 432,709 140,128 572,837 303,031 77,950 380,981 218,957 25,425 244,382 Timing of revenue recognition Transferred at a point in time 432,709 140,128 572,837 303,031 77,950 380,981 218,957 25,425 244,382 Total net revenue from contracts with customers 432,709 140,128 572,837 303,031 77,950 380,981 218,957 25,425 244,382 The Company’s revenues from contracts with customers are all in Brazil. The Company recognized impairment losses on trade receivables arising from contracts with customers, included under selling expenses in the statement of income (loss) of R$ 17,392, R$ 9,588 and R$ 5,227 for the years ended December 31, 2019, 2018 and 2017, respectively. Revenues tax benefits The Company is not subjected to the payment of the social integration program tax ( Programa de Integração Social , or PIS) and the social contribution on revenues tax ( Contribuição para o Financiamento da Seguridade Social , or COFINS) on the sale of books. The sale of printed and digital books is also exempt from the Brazilian municipal taxes and from the Brazilian value added tax ( Imposto sobre Operações relativas à Circulação de Mercadorias e sobre Prestações de Serviços de Transporte Interestadual e Intermunicipal e de Comunicação , or ICMS).

Expenses by nature

Expenses by nature	12 Months Ended
	Dec. 31, 2019
Expenses by Nature
Expenses by nature	22 Expenses by nature 2019 2018 2017 Content providing 61,953 41,551 34,452 Operations personnel 12,500 11,477 10,979 Inventory reserves 8,476 7,252 4,481 Freight 14,569 7,687 4,087 Depreciation and amortization 15,311 5,869 3,161 Other 4,449 6,909 1,357 Cost of sales 117,258 80,745 58,517 Sales personnel 87,352 49,041 26,721 Depreciation and amortization 23,573 11,939 9,799 Sales & marketing 31,208 17,931 9,319 Customer support 30,755 17,274 8,173 Allowance for doubtful accounts 17,392 9,588 5,227 Real estate rentals 1,728 1,923 1,751 Other 7,772 5,574 4,324 Selling expenses 199,780 113,270 65,314 Corporate personnel 53,443 39,382 24,633 Third party services 43,415 14,269 7,814 Real estate rents 2,613 3,429 1,625 Travel expenses 3,439 2,891 2,034 Tax expenses 2,331 2,858 1,716 Software licenses 1,487 1,098 1,128 Share-based compensation plan 66,978 60,297 1,890 Depreciation and amortization 9,430 1,786 1,328 Other 8,302 3,744 6,763 General and administrative expenses 191,438 129,754 48,931 Total 508,476 323,769 172,762

Finance result

Finance result	12 Months Ended
	Dec. 31, 2019
Finance result
Finance result	23 Finance result 2019 2018 2017 Income from financial investments 18,443 11,633 11,415 Changes in fair value of financial investments (a) 28,886 4,322 — Changes in fair value of derivative instruments (b) 18,599 19,839 258 Foreign exchange gains 1,745 138 — Interest income 1,042 — — Other 3,332 686 858 Finance income 72,047 36,618 12,531 Changes in fair value of derivative instruments (b) (18,126) (19,180) (6,915) Changes in accounts payable to selling shareholders (Note 17) (89,403) (130,378) — Interest in acquisition of investments (c) (42,206) (9,781) (11,179) Financial discounts granted (3,343) (1,911) (1,266) Foreign exchange loss (2,300) (34,573) — Interest in lease liabilities (1,489) — — Other (13,988) (2,972) (1,029) Finance costs (170,855) (198,795) (20,389) Finance result (98,808) (162,177) (7,858) (a) Refers to gains on financial investments measured at FVPL. (b) Refers to changes in the fair value of derivative financial instruments, comprised of the put and call options from business acquisitions and investments in associates and joint ventures. (c) Refer to interest expense on liabilities related to business combinations and investments in associates.

Income taxes

Income taxes	12 Months Ended
	Dec. 31, 2019
Income taxes
Income taxes	24 Income taxes (a) Reconciliation of income taxes expense 2019 2018 2017 Profit (loss) before income taxes (42,534) (100,901) 66,356 Combined statutory income taxes rate - % 34 % 34 % 34 % Income tax benefit (expense) at statutory rates 14,462 34,306 (22,561) Reconciliation adjustments: Share of loss of equity-accounted investees (a) (612) (269) (240) Effect of presumed profit of subsidiaries (b) 18,593 11,080 907 Permanent differences (c) — (26,097) — Other additions (exclusions), net 660 (1,035) (822) 33,103 17,985 (22,716) Current (46,850) (26,553) (31,010) Deferred 79,953 44,538 8,294 Income taxes benefit (expense) 33,103 17,985 (22,716) Effective rate % 17.8 % 34.2 % (a) Refers to the effect of 34% on the share of profit (loss) of investees for the year. (b) Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Company’s subsidiaries adopted this tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries. (c) Refers mainly to permanent differences of non-deductible expenses from share-based compensation plan and foreign exchange loss and others. (b) Deferred income taxes The changes in the deferred tax assets and liabilities are as follows: Change in As of Change in As of accounting January Profit accounting January Profit Business 2017 practice 1, 2018 or loss Equity 2018 practice 1, 2019 or loss combination Equity 2019 Deferred tax assets Tax losses carryforward 3,607 — 3,607 757 — 4,364 — 4,364 11,919 — — 16,283 Temporary differences Financial instruments from acquisition of interests 7,879 — 7,879 51,287 — 59,166 — 59,166 47,563 — — 106,729 Other temporary differences 3,634 1,450 5,084 1,501 — 6,585 613 7,198 14,610 7,517 — 29,325 Share base compensation 2,217 — 2,217 (2,217) — — — — 7,960 — — 7,960 Tax benefit from tax deductible goodwill — — — — 46,314 46,314 — 46,314 (2,009) — (29,417) 14,888 Amortization of intangible assets 1,205 — 1,205 77 — 1,282 — 1,282 5,391 — — 6,673 Total deferred tax assets 18,542 1,450 19,992 51,405 46,314 117,711 613 118,324 85,434 7,517 (29,417) 181,858 Deferred tax liabilities Financial instruments from acquisition of interests (12,414) — (12,414) (5,752) — (18,166) — (18,166) (5,707) — — (23,873) Other temporary differences (348) — (348) (1,115) — (1,463) — (1,463) 226 — — (1,237) Total deferred tax liabilities (12,762) — (12,762) (6,867) — (19,629) — (19,629) (5,481) — — (25,110) Deferred tax assets (liabilities), net 5,780 1,450 7,230 44,538 46,314 98,082 613 98,695 79,953 7,517 (29,417) 156,748 Deferred tax assets 5,860 7,310 99,460 100,073 156,748 Deferred tax liabilities (80) (80) (1,378) (1,378) — As of December 31, 2019, the Company had unrecognized deferred income tax assets in the amount of R$ 1,382 (2018: R$ 3,545) with respect to tax loss carryforward. The net operating losses carried forward do not expire, however, their compensation is limited to 30% of the annual taxable income. The recognition of the deferred income tax assets is supported by the Company’s forecasts of the future profitability and historical results.

Segment information

Segment information	12 Months Ended
	Dec. 31, 2019
Segment information
Segment information	25 Segment information Segment information is presented consistently with the internal reports provided to the Company’s main key executives and chief operating decision makers. They are responsible for allocating resources, assessing the performance of the operating segments, and making the Company’s strategic decisions. The Executive Officers have defined the operating segments based on the reports used to make structured strategic decisions, which allow for decision-making based on these structures: (i) Core : The Core Curriculum business segment provides solutions that address the Brazilian K‑12 curriculum requirements through a personalized and interactive learning experience. Students access content in various formats, such as digital, video, print, and other audiovisual formats that are aligned with the daily curriculum of their classes; (ii) Supplemental : The Supplemental Solutions business segment provide additional value-added content that private schools can opt, in addition to the Core Curriculum solution. Currently, the Company’s primary Supplemental product is an English as a second language (ESL) bilingual teaching program. Technological solutions for communication with the students’ parents, learning laboratories that use the methodology of maker culture and content to develop socio-emotional skills are also offered. The Executive Officers do not make strategic decisions or evaluate performance based on geographic regions. Currently, the Company operates solely in Brazil and mainly all the assets, liabilities and results are allocated in Brazil. Also, based on the agreements signed with private schools as of December 31, 2019 and 2018, none of the customers individually represented more than 5% of total revenue. 2019 Total Adjustments reportable and Core Supplemental segments eliminations Total Revenue 433,372 139,465 572,837 — 572,837 Cost of sales (97,513) (19,745) (117,258) — (117,258) Gross profit 335,859 119,720 455,579 — 455,579 Selling expenses — — — — (199,780) General and administrative expenses — — — — (191,438) Other income (expenses), net — — — — (6,287) Operating profit — — — — 58,074 Finance income — — — — 72,047 Finance costs — — — — (170,855) Share of loss of equity-accounted investees — — — — (1,800) Loss before income taxes — — — — (42,534) Income taxes income — — — — 33,103 Loss for the year — — — — (9,431) Other disclosures — — — — — Depreciation and amortization 43,854 4,460 48,314 — 48,314 Investments in associates and joint ventures 48,574 — 48,574 — 48,574 Capital expenditures 45,851 8,242 54,093 — 54,093 2018 Total Adjustments reportable and Core Supplemental segments eliminations Total Revenue 303,031 77,950 380,981 — 380,981 Cost of sales (70,903) (9,842) (80,745) — (80,745) Gross profit 232,128 68,108 300,236 — 300,236 Selling expenses (87,186) (26,084) (113,270) — (113,270) Segment profit 144,942 42,024 186,966 — 186,966 General and administrative expenses — — — — (129,754) Other income (expenses), net — — — — 4,856 Operating profit — — — — 62,068 Finance income — — — — 36,618 Finance costs — — — — (198,795) Share of loss of equity-accounted investees — — — — (792) Loss before income taxes — — — — (100,901) Income taxes income — — — — 17,985 Loss for the year — — — — (82,916) Other disclosures Depreciation and amortization 17,997 1,597 19,594 — 19,594 Investments in associates and joint ventures 11,862 — 11,862 — 11,862 Capital expenditures 28,165 8,092 36,257 — 36,257 2017 Total Adjustments reportable and Core Supplemental segments eliminations Total Revenue 218,957 25,425 244,382 — 244,382 Cost of sales (54,317) (4,200) (58,517) — (58,517) Gross profit 164,640 21,225 185,865 — 185,865 Selling expenses (56,318) (8,996) (65,314) — (65,314) Segment profit 108,322 12,229 120,551 — 120,551 General and administrative expenses — — — — (48,931) Other income (expenses), net — — — — 3,299 Operating profit — — — — 74,919 Finance income — — — — 12,531 Finance costs — — — — (20,389) Share of loss of equity-accounted investees — — — — (705) Profit before income taxes — — — — 66,356 Income taxes expense — — — — (22,716) Profit for the year — — — — 43,640 Other disclosures Depreciation and amortization 12,650 1,638 14,288 — 14,288 Investments in associates and joint ventures 12,654 — 12,654 — 12,654 Capital expenditures 7,183 4,200 11,383 — 11,383 Capital expenditures consist of additions of property and equipment and intangible assets. There were no inter-segment revenues in the years ended December 31, 2019, 2018 and 2017. Segment performance is evaluated based on segment profit and is measured consistently with profit or loss in the consolidated financial statements. Selling expenses, general and administrative expenses, other income (expenses) net, finance result, share of profit (loss) of equity-accounted investees and income taxes are managed on a Company basis and are not allocated to operating segments. There were no adjustments or eliminations in the profit or loss between segments. Segment assets and liabilities are measured in the same way as in the financial statements. These assets and liabilities are allocated based on the operations of the segment. Total Adjustments reportable and Core Supplemental segments eliminations Total As of December 31, 2019 Total assets 2,999,497 176,196 3,175,693 (14,270) 3,161,423 Total liabilities 1,535,695 45,188 1,580,883 (14,270) 1,566,613 As of December 31, 2018 Total assets 1,273,107 62,006 1,335,113 (235) 1,334,878 Total liabilities 254,744 10,485 265,229 (235) 264,994

Financial instruments

Financial instruments	12 Months Ended
	Dec. 31, 2019
Financial instruments
Financial instruments	26 Financial instruments The Company holds the following financial instruments: Financial assets Assets at FVPL Assets at amortized cost Total December 31, 2019 Cash and cash equivalents 48,900 — 48,900 Financial investments 498,584 80,910 579,494 Trade receivables — 329,428 329,428 Financial instruments from acquisition of interests 35,946 — 35,946 Related parties — 16,111 16,111 Other assets — 4,109 4,109 583,430 430,558 1,013,988 Assets at FVPL Assets at amortized cost Total December 31, 2018 Cash and cash equivalents 12,301 — 12,301 Financial investments 2,370 808,789 811,159 Trade receivables — 136,611 136,611 Financial instruments from acquisition of interests 26,630 — 26,630 Related parties — 1,226 1,226 41,301 946,626 987,927 Liabilities at Financial liabilities Liabilities at FVPL amortized cost Total December 31, 2019 Trade payables — 34,521 34,521 Financial instruments from acquisition of interests 33,940 — 33,940 Accounts payable to selling shareholders 328,668 887,564 1,216,232 Leases liabilities — 25,857 25,857 Loans and financing — 98,561 98,561 362,608 1,046,503 1,409,111 December 31, 2018 Trade payables — 14,845 14,845 Financial instruments from acquisition of interests 25,097 — 25,097 Accounts payable to selling shareholders — 181,381 181,381 25,097 196,226 221,323 The Company’s exposure to certain risks associated with the financial instruments is discussed in Note 27. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above. (a) Financial instruments at fair value through profit or loss Financial investments The Company designated part of its financial investments as financial assets at fair value through profit or loss, related to investment fund which investments were entered to achieve 99.37% of the CDI. The Company designated these investments at fair value through profit or loss, given the swaps exist solely for the counterparty to deliver a fixed return on CDI. See Note 6 for more details on the financial investments. Derivative instruments The Company acquired entities under business combinations and through the acquisition of interests in associates and joint ventures. The share purchase agreements contain put and call options and forward contracts that are also measured at fair value through profit or loss. As of and for the years ended December 31, 2019, 2018 and 2017 none of the Company’s derivatives have been designated as hedges for accounting purposes. (ii) Amounts recognized in profit or loss Changes in fair values of financial instruments at fair value through profit or loss are recorded in finance income (costs) in profit or loss (gain of R$ 473, gain of R$ 659 and loss of R$ 6,657 for the years ended in December 31, 2019, 2018 and 2017, respectively). (b) Recognized fair value measurements (i) Fair value hierarchy The table below explains the judgements and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value through profit or loss in the consolidated financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels. Assets and liabilities are measured and recognized at fair value as follows: Hierarchy 2019 2018 Financial assets Cash and cash equivalents Level 2 48,900 12,301 Financial investments Level 2 498,584 2,370 Derivative financial instruments Level 3 35,946 26,630 Financial liabilities Derivative financial instruments Level 3 33,940 25,097 Accounts payable to selling shareholders Level 3 328,668 — As of December 31, 2019, and 2018, the Company assessed the fair values of its financial instruments. This assessment does not indicate fair values significantly different from the carrying amounts. The estimated realizable values of financial assets and liabilities were determined based on available market information and appropriate valuation methodologies. The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There were no transfers between levels for recurring fair value measurements during the financial statements’ periods presented herein. (ii) Valuation techniques used to determine fair values Specific valuation techniques used to value financial instruments include: · the use of quoted market prices or dealer quotes for similar instruments; · the fair value of derivatives is calculated with Black & Scholes; and · the fair value of the remaining financial instruments is determined using discounted cash flow analysis. All of the resulting fair value estimates are included in level 2 except for contingent consideration and certain derivative contracts, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. (iii) Fair value measurements using significant unobservable inputs (level 3) The following table presents the changes in level 3 items for the years ended December 31, 2019, 2018 and 2017. Financial instruments Financial instruments from acquisition of from acquisition of Accounts payable to Recurring fair value measurements interests (assets) interests (liabilities) selling shareholders Balance as of December 31, 2016 20,610 (30,076) — Acquisitions — (364) (30,144) Disposals (4,542) 19,852 — Interest expense — — (6,486) Deferred revenue in Escola de Aplicação São José dos Campos — 51 — Losses recognized in statement of income (3,557) (3,100) — Balance as of December 31, 2017 12,511 (13,637) (36,630) Payment of capital increase in Geekie — 2,000 — Changes in accounts payable to selling shareholders — — (129,430) Interest expense — — (8,350) Deferred revenue in Escola de Aplicação São José dos Campos — 50 — Gains (losses) recognized in statement of income (loss) 14,119 (13,510) — Balance as of December 31, 2018 26,630 (25,097) (174,410) Acquisition of Nave à Vela — — (58,194) Payment of acquisition of Nave à Vela — — 21,098 Changes in accounts payable to selling shareholders — — (89,403) Interest expense — — (35,127) Deferred revenue in Escola de Aplicação São José dos Campos Ltda. — 54 — Fair value held in step acquisitions — — 7,368 Gains (loss) recognized in statement of income 9,316 (8,897) — Balance as of December 31, 2019 35,946 (33,940) (328,668) (iv) Transfers between levels 2 and 3 In the years ended December 31, 2019, 2018 and 2017, the Company did not transfer any financial instruments from level 2 into level 3. (v) Valuation processes The finance department of the Company performs and reviews the valuations of items required for financial reporting purposes, including level 3 fair values. Discussions of valuation processes and results conform with the Company’s yearly reporting periods. Also, the Company hires specialists to measure fair value of certain financial assets and liabilities independently. The main level 3 inputs used by the Company are derived and evaluated as follows: · Discount rates for financial assets and financial liabilities are determined using a capital asset pricing model to calculate a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset. · Risk adjustments specific to the counterparties (including assumptions about credit default rates) are derived from observable market data of credit risk grading. · Earnings growth factors for unlisted equity securities are estimated based on market information for similar types of companies. · Contingent consideration – expected cash outflows are estimated based on the terms of the business combinations and the entity’s knowledge of the business as well as how the current economic environment is likely to impact it.

Risk

Risk	12 Months Ended
	Dec. 31, 2019
Risk
Risk	27 Risk (a) Financial risk management The Company monitors market, credit and operational risks in line with the objectives in capital management and counts with the support, monitoring and oversight of the Board of Directors in decisions related to capital management and its alignment with the objectives and risks. The Company monitors the effectiveness of the Company’s risk management. The sensitivity analyses in the following sections relate to the position as of December 31, 2019. Capital management The Company’s objectives when managing capital are to: · maximize shareholder value; · safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and · maintain an optimal capital structure to reduce the cost of capital. In order to maintain or alter the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2019, 2018 and 2017. (i) Foreign exchange risk Exposure The Company’s exposure to foreign currency risk as of December 31, 2019 and December 31, 2018, was as follows: 2019 2018 Cash and cash equivalents (Note 5) 23,346 3,615 Financial investments 1,629 — The Company does not operate outside Brazil and does not have exposure to foreign exchange risk on commercial transactions, i.e., revenues or expenses. Sensitivity analysis The sensitivity analysis as of December 31, 2019 consider three scenarios of U.S. dollar exchange rate variation, as follows: · Base scenario - exchange rate as of December 31, 2019 of R$ 4.0301 per US$ 1.00; · Scenario I - a 10% increase in the U.S. dollar exchange rate to R$ 4.4331; and · Scenario II - a 10% decrease in the U.S. dollar exchange rate to R$ 3.6271. The table below set forth the sensitivity analysis as of December 31, 2019, for the amount of cash and cash equivalents and financial investments denominated in U.S. dollar of US$ 6,197 thousand: Base scenario Scenario I Scenario II Exchange rate: Exchange rate: Exchange rate: R$ 4.0301 R$ 4.4331 R$ 3.6271 Finance income (costs) — R$ 2,497 R$ (2,497) (ii) Liquidity risk Management of the Company has responsibility for mitigating liquidity risk. In order to achieve its goals, management regularly reviews the risk and maintains appropriate reserves, including bank credit facilities with first tier financial institutions. Management also continuously monitors projected and actual cash flows and the combination of the maturity profiles of the financial assets and liabilities. The main requirements for financial resources used by the Company arise from the need to make payments for printing educational content, freight expenses, operating expenses, labor and social obligations and other operating disbursements. The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted amounts: Less More On than 3 3 to 12 1 to 5 than 5 As of December 31, 2019 demand months months years years Total Trade payables — 34,521 — — — 34,521 Lease liabilities — 2,037 4,808 19,012 — 25,857 Loans and financing — — 98,561 — — 98,561 Financial instruments from — — — 33,940 — 33,940 acquisition of interests Accounts payable to selling Shareholders — — 117,959 1,098,273 — 1,216,232 — 36,558 221,328 1,151,225 — 1,409,111 Less More On than 3 3 to 12 1 to 5 than 5 As of December 31, 2018 demand months months years years Total Trade payables — 14,845 — — — 14,845 Financial instruments from — 13 38 25,046 — 25,097 acquisition of interests Accounts payable to selling Shareholders — — 830 180,551 — 181,381 — 14,858 868 205,597 — 221,323 (iii) Financial counterparty risk This risk arises from the possibility that the Company may incur losses due to the default of its counterparties. To mitigate these risks, the Company adopts as practice the analysis of the financial and equity situation of its counterparties. Counterparty credit limits, which take published credit ratings and other factors into account, are set to cover the Company’s total aggregate exposure to a single financial institution. Exposures and limits applicable to each financial institution are approved by our treasury within guidelines approved by the board and are reviewed on a regular basis. (iv) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s investments with floating interest rates. The Company is mainly exposed to fluctuations in CDI interest rates on financial investments, related parties, accounts payable to selling shareholders and loans and financing. Sensitivity analysis The Company has a significant portion of its financial investments indexed to the CDI variation. According to the reference rates obtained from the website of the Brazilian Stock Exchange – B3 S.A. - Brasil, Bolsa, Balcão (“B3”) and projected for 12 months, as of December 31, 2019 the CDI rate was 4.21%. As of December 31, 2019, the Company’s management estimated two scenarios of the CDI rates at +10% and -10%, which were used as a basis for the possible and remote scenarios, respectively. The table below shows a summary of the scenarios estimated by Management and the effect on profit before income taxes: Exposure +10% -10% Cash, bank deposits and cash equivalents 25,554 108 (108) Financial investments 577,865 2,433 (2,433) Accounts payable to selling shareholders 879,111 3,701 (3,701) Related parties 14,813 62 (62) Loans and financing 98,561 415 (415) The Company has derivatives (calls and put options) on non-controlling interests in associates and joint ventures acquired. The fair value of these derivatives is calculated using multiple scenarios and intrinsic methods. The major inputs are: exercise price, exercise date, volatility and gross profit of the associates and joint ventures. The Company performed evaluation of their fair value at the end of each year in order to account for any changes to it, as disclosed in Note 26. These derivatives, which are not publicly traded, have specific conditions that do not enable the Company to present a sensitivity analysis in relation to specific interest rates or market indexes. Also, these derivatives are part of the Company’s strategy to acquire companies directly related to its continuous growth and are considered by the Company as a deferred payment to the previous shareholders of the acquirees. Changes in liabilities arising from financing activities January 1, 2017 Cash flows Other December 31, 2017 Cash flows Other December 31, 2018 Dividends payable 17,843 (75,053) 67,721 10,511 (85,000) 74,489 — Total 17,843 (75,053) 67,721 10,511 (85,000) 74,489 — Change in As of December 31, accounting January 1, Cash December 31, 2018 practice 2019 flows Other 2019 Leases — 20,089 20,089 (5,259) 11,027 25,857 Loans and financing — — — 97,011 1,550 98,561 Total — 20,089 20,089 91,752 12,577 124,418 Other market risk The Company has a significant portion of its accounts payable whose exercise price is determined by multiples of EBITDA discounted to present value for the acquisition of the remaining interest of International School as described in note 17. Sensitivity analysis As of December 31, 2019, the Company’s management estimated two scenarios of the rates at +10% and -10% of revenue and +5% and -5% of Weighted Average Capital Cost (WACC), whose premises are used in the calculation of debt. The table below shows a summary of the scenarios estimated: 10 % % Revenue 23,413 (23,413) 5 % % WACC 3,510 (3,510)

Commitments and contingencies

Commitments and contingencies	12 Months Ended
	Dec. 31, 2019
Commitments and contingencies
Commitments and contingencies	28 Commitments and contingencies (i) Legal proceedings The Company is party to labor and tax litigation in progress, which arise during the ordinary course of business. The provisions for probable losses arising from these matters are estimated and periodically adjusted by Management, supported by the opinion of its external legal advisors. Labor Taxes Total Balance at December 31, 2017 — — — Additions 17 124 141 Reversals — (10) (10) Balance at December 31, 2018 17 114 131 Additions 209 145 354 Reversals (104) (130) (234) Balance at December 31, 2019 122 129 251 As of December 31, 2019, the Company was party to lawsuits classified as possible losses totaling R$ 7,209 (2018: R$ 5,170), as shown below: 2019 2018 Civil (a) 6,113 4,425 Labor (b) 1,096 745 Total 7,209 5,170 (a) The civil proceedings relate mainly to customer claims, including those related to the early termination of certain agreements, among others. (b) The labor proceedings to which the Company is a party were filed by former employees or suppliers and third-party service providers’ employees seeking joint liability for the acts of the Company’s suppliers and service providers. On September 19, 2019, Mr. Ulisses Borges Cardinot, the non-controlling shareholder in our subsidiary, International School, filed a request for arbitration with the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada in Brazil against Arco Platform Limited, EAS Educação S.A. and Arco Educação S.A. This request for arbitration is purporting to assert the non-controlling shareholder’s rights related to the calculation of the purchase price under the Investment Agreement; however, due to its early stage, it is not possible to confirm which claims will be asserted. Due to the arbitration proceeding and based on standard IAS 37 Provisions, contingent liabilities and contingent assets, the Company understands that the circumstances, risks and uncertainties of the arbitration must be taken into consideration in order to reach the best estimate of the liability. Contingencies should be reevaluated at each balance sheet date and adjusted to reflect the best current estimate. Thus, in light of the current early stage of the proceeding and the range of potential outcomes, the calculation methodology of the estimate has remained unchanged, consistent with the estimate previously calculated and reported. Based on this analysis, the Company has recorded the provision at the present value of the amount considered the appropriate estimate of the amount payable to the non-controlling shareholder upon the exercise of the put option and discounted to present value. The provision is calculated based on the realized EBITDA for the school year of 2019 (first installment) and the projected EBITDA for school year of 2020 (second installment), both, net of debts, as determined in the agreement. The school year is defined as the twelve-month period starting in October of the previous year to September of the mentioned current year. The first installment would be paid in the first half of 2020 and the second installment in the first half of 2021. The Company performed a review of previous operations projections, and based on the new projected numbers, the liability increased by R$ 89,403 in 2019 and was recorded as financial expense as described in note 17a. During 2019, the Company recognized R$33,909 of interest related to the liability. The Company’s review of previous operations projections as described above was performed with no change to the accounting criteria applied to prior financial periods. The operation projections may vary in subsequent financial periods depending on the application of the agreement and the outcome of the arbitration, and the final basis of calculation of its financial liability and will be updated accordingly in its financial statements for future financial periods.

Transactions not involving cash

Transactions not involving cash	12 Months Ended
	Dec. 31, 2019
Transactions not involving cash
Transactions not involving cash	29 Transactions not involving cash During the years ended December 31, 2019, 2018 and 2017, the Company carried out the following non-cash activities, which are not reflected in the statement of cash flows: 2019 2018 2017 Share issuance costs – unpaid — 674 — Tax benefit from tax deductible goodwill (Note 19d) (46,314) 46,314 — Investing - accounts payable to selling shareholders — — 58,003 Investing - derivative financial instruments (Note 2.2) 14,597 — — Business combinations - derivative financial instruments (Note 2.2) 38,924 — — Lease adoption (Note 2.5) 1,251 — — Forward contract - Nave (Note 4) 29,728 — — Retained payments from business combination (Note 4) 874,440 — — Acquisition from business combination (Note 4) 39,419

Subsequent events

Subsequent events	12 Months Ended
	Dec. 31, 2019
Subsequent events
Subsequent events	30 Subsequent events Loan agreements (a) Geekie Desenvolvimento de Softwares S.A. On February 17, 2020, the investee Geekie entered into a loan agreement in the amount of R$1,500, maturing on April 15, 2021, and an interest rate of 7.82% p.a. (b) Nave à Vela Ltda. On the same date, the investee Nave entered into a loan agreement in the amount of R$2,000, maturing on March 8, 2022, and an interest rate of 8.08% p.a. Acquisition of additional shares of Geekie On March 4, 2020, Arco acquired an additional 10.51% interest in Geekie’s share capital from minority shareholders for R$12,675 increasing our total interest to 48.04%. Coronavirus Since December 2019, a novel strain of coronavirus has spread in China, Italy, U.S., Brazil and other countries. Such events could cause disruption of regional or global economic activity, which could reduce the number of schools and students that use our products and adversely affect our operations and financial results. In addition, such events could cause the closing of schools, closing or reduction in production of our materials provided by third parties, stoppage or closing of transportation companies for undetermined periods, which could also adversely affect our operation and financial results. The extent to which the coronavirus impacts our financial results and operations will depend on future developments, which are uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact in Brazil, among others. Therefore, it is not possible to estimate the extent of potential impacts in our financial statements. We are continuously monitoring the situation very closely and actively evaluating the implications for our business and taking the measures to mitigate the potential risks.

Significant accounting polici_2

Significant accounting policies (Policies)	12 Months Ended
	Dec. 31, 2019
Significant accounting policies
Basis for preparation of the consolidated financial statements	2.1 Basis for preparation of the consolidated financial statements The Company’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets, derivative financial instruments and contingent consideration from business combinations that have been measured at fair value. Arco is a holding company and considers the currency of the local environment of the operational companies in Brazil as its functional currency, as this is the environment which drives the dividend income it receives, which is its primary source of revenue. Therefore, the functional currency of the Company is the Brazilian real and the consolidated financial statements are presented in Brazilian reais (“BRL” or “R$”). All amounts are rounded to the nearest thousands, except when otherwise indicated. The consolidated financial statements provide comparative information in respect of the previous period.
Significant events during the year	2.2 Significant events during the year During the year ended December 31, 2019, the Company had the following changes in its corporate organization: (a) Internal restructurings Escola de Aplicação São José dos Campos Ltda. On January 2, 2019, the Company agreed to sell its shares of Escola de Aplicação São José dos Campos Ltda., which is part of the Company’s Core segment, to its minority shareholders. The transaction price of R$ 3,741 will be received in 16 quarterly installments from January 2022 to October 2025, adjusted by the IGP-M (Brazilian general market price index issued by the FGV – “Fundação Getúlio Vargas”). The gain on sale of investment was R$ 3,286, and is classified in Other income (expenses) net in the statement of income. SAE Digital S.A. On February 1, 2019, EAS spun-off its investment in SAE Digital to a new holding company, which was subsequently merged by SAE Digital and its shares were issued to Arco Brazil. When EAS acquired SAE Digital, goodwill was treated as not deductible. However, after this transaction, SAE Digital has the tax benefit of the deductibility of the goodwill, which will generate a future tax benefit and a deferred tax asset of R$ 5,135. The deductible goodwill amounts to R$ 14,597. The net effect of R$ 9,462 was accounted for in equity. Novagaúcha Editora e Livraria Ltda. On March 31, 2019, Novagaúcha Editora e Livraria Ltda. was merged by Barra Américas Editora Ltda. The goodwill of this transaction is R$ 4,330 and was charged to equity. No tax benefit was generated in this transaction. NS Ventures Participações Ltda. and NS Educação Ltda. On May 1, 2019, continuing the corporate restructuring, SAE Digital merged NS Educação Ltda. (“NS Educação”) and NS Ventures Participações S.A. (“NS Ventures”). In 2017, when NS Ventures acquired a 30% interest in SAE Digital and a 100% interest in NS Educação, the goodwill was treated as not deductible; however, after this transaction, SAE Digital has the tax benefit of the deductibility of the goodwill, which will generate a future tax benefit and a deferred tax asset of R$ 11,762. The deductible goodwill amounts to R$ 34,594. The net effect of R$ 22,832 was accounted for in equity. NLP Soluções Educacionais Ltda. NLP Soluções Educacionais Ltda. (“Pleno”) is a subsidiary founded in 2019 through the contribution of 100% of the share capital of EAS Educação S.A. which is the subsidiary of Arco Brazil, its parent company. Pleno’s corporate purpose is to provide content to develop socio-emotional skills. (b) Acquisition of investments Nave à Vela Ltda. In May 2019, the Company acquired a 13.2% interest in Nave à Vela Ltda. (“Nave”) and such investment was accounted for under the equity method through October 2019, when the Company acquired control and Nave became a consolidated subsidiary of the Company with 51.0% interest in the share capital of Nave. See Note 4b. EEM Licenciamento de Programas Educacionais Ltda. On April 29, 2019, the Company acquired the control of EEM Licenciamento de Programas Educacionais Ltda. (“EEM”) by acquiring 100% of its outstanding ordinary shares and voting interests as described in Note 4a. Sistema Positivo de Ensino On May 7, 2019, the Company announced that it entered into a definitive agreement to acquire Sistema Positivo de Ensino (“Positivo”), one of the largest K‑12 content providers to private schools in Brazil. Positivo is composed of seven entities as follows: Positivo Soluções Didáticas Ltda., Editora Piá Ltda., Osterreich Investimentos – Participações Societárias S.A., Mendel Investimentos – Participações Societárias S.A., Torino Investimentos – Participações Societárias S.A., Remare Investimentos – Participações Societárias S.A., Fahe Investimentos – Participações Societárias S.A. On November 1, 2019 the Company concluded the transaction through its subsidiary EAS and, on the same date, acquired control of Positivo. See Note 4c. Geekie Desenvolvimento de Softwares S.A. In 2019, Arco acquired an additional 31% interest in the share capital of Geekie through a capital increase and the purchase of minority shareholders increasing its total interest to 37.5% as descried in Note 11.
Basis of consolidation and investments in associates and joint ventures	2.3 Basis of consolidation and investments in associates and joint ventures The consolidated financial statements comprise the financial statements of the Company as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017. The table below is a list of the Company’s subsidiaries, associates and joint venture: Principal Investment Direct and indirect interest Name activities Country type 2019 2018 2017 Arco Educação S.A. Holding Brazil Subsidiary 100.0 % 100.0 % — EAS Educação S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Barra Américas Editora Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Distribuidora de Material Didático Desterro Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Novagaúcha Editora e Livraria Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % SAS Sistema de Ensino Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Arco Ventures S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % SAS Livrarias Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % SAE Digital S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Escola de Aplicação São José dos Campos Ltda. Educational services Brazil Subsidiary — 69.6 % 69.6 % International School Serviços de Ensino, Treinamento e Editoração, Franqueadora S.A. Educational content Brazil Subsidiary 51.5 % 51.5 % 51.5 % NS Ventures Participações Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % NS Educação Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % Nave à Vela Ltda. Educational content Brazil Subsidiary 51.0 % — — EEM Licenciamento de Programas Educacionais Ltda. Educational technology Brazil Subsidiary 100.0 % — — NLP Soluções Educacionais Ltda. Educational content Brazil Subsidiary 100.0 % — — Sistema Positivo de Ensino Educational content Brazil Subsidiary 100.0 % — — WPensar S.A. Educational technology Brazil Joint venture 25.0 % 25.0 % 25.0 % Geekie Desenvolvimento de Softwares S.A. Educational technology Brazil Associate 37.5 % 8.05 % 6.5 % Control is achieved when the Company is exposed to, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases control of the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Company’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, and any resulting gain or loss is recognized in profit or loss. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statements of income (loss) and comprehensive income (loss), changes in equity and financial position, respectively.
Business combinations and goodwill	a) Business combinations and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in general and administrative expenses. When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date. Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognized in the statement of income (loss) in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each segment that is expected to benefit from the combination. Where goodwill has been allocated to a segment and part of the operation within that segment is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the segment unit retained. The current Brazilian tax law allows the deductibility of the acquisition date goodwill and fair value of net assets acquired when a corporate reorganization occurs after acquisition by the Company (i.e. when the Company merges or spins off the businesses acquired). Until such action occurs, the tax and accounting bases of the net assets acquired are the same as of the acquisition date and no deferred tax effects are recognized. Certain acquired subsidiaries utilize the presumed profit regime as described in Note 24.a to calculate income taxes. Under this regime, there is no difference between the carrying amount and related tax basis of assets and liabilities and therefore no deferred income taxes were recorded in these financial statements at acquisition date or any subsequent periods.
Investment in associates and joint venture	b) Investment in associates and joint venture An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Company’s investments in its associate and joint venture are accounted for using the equity method. Under the equity method of accounting, the investment in an associate or a joint venture is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint ventures is included in the carrying amount of the investment and is not tested for impairment separately. The statement of income (loss) reflects the Company’s share of the results of operations of the associate or joint venture. In addition, when there has been a change recognized directly in the equity of the associate or joint venture, the Company recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture. The aggregate of the Company’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of income (loss) outside operating profit and represents profit or loss after tax of the associate or joint venture. The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on its investment in its associate or joint venture. At each reporting date, the Company determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within share of profit (loss) of equity-accounted investees in the statement of income (loss).
Current versus non-current classification	c) Current versus non-current classification The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: · Expected to be realized or intended to be sold or consumed in the normal operating cycle; · Held primarily for the purpose of trading; · Expected to be realized within twelve months after the reporting period; or · Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: · It is expected to be settled in the normal operating cycle; · It is held primarily for the purpose of trading; · It is due to be settled within twelve months after the reporting period; or · There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Fair value measurement	d) Fair value measurement The Company measures financial instruments such as certain financial investments and derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: · in the principal market for the asset or liability; or · in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: · Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities. · Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. · Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. At each reporting date, the Company analyzes the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company’s accounting policies. For this analysis, the Company verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Company also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
Financial instruments - initial recognition and measurement	e) Financial instruments – initial recognition and measurement A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. f) Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price under IFRS 15. For a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income (OCI), it should give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Subsequent measurement For purposes of subsequent measurement, financial assets are classified as: amortized cost or fair value through profit or loss. There are no financial assets designated as fair value through OCI. Financial assets at amortized cost Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Company’s financial assets at amortized cost include trade receivables and certain financial investments. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss. This category includes derivative instruments. A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Company’s consolidated statement of financial position) when: · The rights to receive cash flows from the asset have expired; or · The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement‑and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay. Impairment Further disclosures relating to impairment of financial assets are also provided in the following notes: · Disclosures for significant assumptions - Note 3 · Trade receivables, including contract assets - Note 7 The Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Company considers a financial asset in default when contractual payments are 360 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. g) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade payables, loans and borrowings, financial instruments from acquisition of interests and accounts payable to selling shareholders. Subsequent measurement For purposes of subsequent measurement, financial liabilities are classified in two categories: · Financial liabilities at fair value through profit or loss · Financial liabilities at amortized cost (loans and borrowings) Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered by the Company that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the statement of income (loss). Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. Financial liabilities at amortized cost (loans and borrowings) After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of income (loss). Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of income (loss). h) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Derivative financial instruments	i) Derivative financial instruments Initial recognition and subsequent measurement The Company has derivative financial instruments from call and put options from acquisitions of subsidiaries, associates and joint venture. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are recorded directly to finance result.
Cash and cash equivalents	j) Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term financial investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term financial investments, as they are considered an integral part of the Company’s cash management.
Inventories	k) Inventories Inventories are measured at the lower of cost and net realizable value. The costs of inventories are based on the average cost method and include costs incurred on the purchase of inventories, editorial production costs and other costs incurred in bringing them to their current location and condition. Costs of purchased inventory are determined after deducting any discounts and recoverable taxes. Educational content in progress is considered as inventories in progress and comprises the costs incurred to create unfinished educational content. This amount is measured based on the allocation of hours incurred by editorial production employees in the preparation of educational content. The inventory reserve for educational material is calculated based on their expected net realizable value. Inventory reserve corresponds to a reserve for inventory obsolescence and is recorded in cost of sales. It is estimated based on the amount of educational materials from prior collections which are no longer used for sale and educational materials which the Company expects will not be sold based on the actual sales. In determining the inventory reserve, the Company considers management’s current assessment of the marketplace, industry trends and projected product demand as compared to the number of units currently in stock.
Property and equipment	l) Property and equipment Property and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows: Machinery and equipment 10 % Vehicles 20 % Furniture and fixtures 10 % IT equipment 20 % Facilities 10 % Leasehold improvements 20% to 33 % An item of property and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of income (loss) when the asset is derecognized. The residual values, useful lives and methods of depreciation of property and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leases	m) Leases The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Company as a lessee The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term, as follows: Buildings 1 to 10 years Equipment 4 years If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. Right-of use assets are subject to impairment. Lease liabilities At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. Short-term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to its short-term leases of properties (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.
Intangible assets	n) Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles are not capitalized, and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The Company capitalizes the costs directly related with the development of the educational platforms used to deliver content. These costs are substantially comprised of technology related services and payroll expenses, recorded as internally developed software in the educational platform accounting ledger. Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognized in statement of income (loss) as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortization and any accumulated impairment losses. Costs associated with maintaining internally developed software are recognized as an expense as incurred. The useful lives of intangible assets are assessed as finite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of income (loss) in the expense category that is consistent with the function of the intangible assets. An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of income (loss).
Impairment of non-financial asset	o) Impairment of non-financial asset Further disclosures relating to impairment of non-financial assets are also provided in the following notes: · Disclosures for significant assumptions – Note 3 · Property and equipment – Note 12 · Intangible assets – Note 14 · Goodwill and intangible assets with indefinite lives – Note 14 The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses of continuing operations are recognized in the statement of income (loss) in expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of income (loss). Goodwill is tested for impairment annually as at December 31 and when circumstances indicate that the carrying value may be impaired. An operating segment is the lowest level within the Company at which the goodwill is monitored for internal management purposes and therefore impairment tests of goodwill have been carried out at each operating segment level. Impairment is determined for goodwill by assessing the recoverable amount of each operating segment to which the goodwill relates. When the recoverable amount is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
Provisions	p) Provisions Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of income (loss) net of any reimbursement, when applicable.
Cash dividend	q) Cash dividend The Company recognizes a liability to pay a dividend when the distribution is authorized, and the distribution is no longer at the discretion of the Company. The distribution is authorized when it is required to pay a dividend of the profit for the year in accordance with the Company’s Articles of Association or is approved by the shareholders. A corresponding amount is recognized directly in equity.
Labor and social obligations	r) Labor and social obligations Labor and social obligations are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Share-based payments	s) Share-based payments Certain key executives of the Company receive remuneration in the form of share-based compensation, whereby the executives render services as consideration for equity instruments (equity-settled transactions). The expenses of equity-settled transactions are determined by the fair value at the date when the grant is made using an appropriate valuation model. That expense is recognized in general and administrative expenses, together with a corresponding increase in equity (share-based compensation reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of income (loss) for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
Revenue from contracts with customers	t) Revenue from contracts with customers Revenue from sale of education content The Company sells educational content to private schools, which is delivered through printed and digital formats to private school. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services., i.e., at the moment it delivers the content to private schools in printed and digital format. The technology is provided solely in support of the best use of its content. Both printed and digital content are the same. The digital content, including its features, is provided with the purpose of supporting the printed content, and it includes video lessons, online homework and assessments that are not customized and have no stand-alone value if used separately or outside of the main context. The digital content and related features are an evolution from a totally printed methodology to a broader approach and will continue to evolve and change in the coming years but are currently still deeply entwined with the printed content. The Company generates substantially all its revenue from contracts that have an average term of three years, pursuant to which the Company provides educational content in printed and digital format to private schools. The Company’s revenue is driven by the number of enrolled students at each customer using the solutions and the agreed price per student per year, all in accordance with the terms and conditions set forth in each contract. Each contract contemplates penalties ranging between 20% to 100% of the remaining total value of the contract in the event of termination. However, the content already delivered to the private schools is not returned to the Company unless the return conditions in the following paragraph are met. Pursuant to the terms of the contracts with the schools, they are required, by the end of November of each year, to provide the Company with an estimate of the number of enrolled students that will access the content in the next school year (which typically starts in February of the following year), allowing the Company to start the delivery of its educational content. Since the contracts with the schools allows product returns or increase in the number of enrolled students up to a certain limit, the Company recognizes revenue for the amount that is expected to be received based on past experience, assuming that the other conditions for revenue recognition are met. A right of return asset (and corresponding adjustment to cost of sales) is also recognized for the right to recover the goods from the customer. The asset is measured at the former carrying amount of the inventory, less any expected costs to recover the goods and any potential decreases in value. The Company updates the measurement of the asset for any revisions to the expected level of returns and any additional decreases in the value of the returned products. Interest income For all financial instruments measured at amortized cost, interest income is recorded using the EIR method. The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income includes also gain from financial investments classified as financial assets at fair value through profit or loss. Interest income is included in finance income in the statement of income (loss).
Taxes	u) Taxes Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except: · When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; · In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint venture, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except: · When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; · In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint venture, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Changes in accounting policies and disclosures	2.5 Changes in accounting policies and disclosures Except for new standards IFRS 16 and IFRIC 23, which are discussed below, the other amendments to standards that apply from January 1, 2019 are primarily clarifications and none required a change in the Company’s accounting policies. Additionally, the Company has not early adopted any new standards, amendments or interpretations that are effective after December 31, 2019. It does not expect that these standards, amendments or interpretations will have a material effect on the Company’s financial statements. New and amended IFRS standards and interpretations that are effective beginning on January 1, 2019 IFRS 16 Leases IFRS 16 supersedes IAS 17 Leases , IFRIC 4 Determining whether an Arrangement contains a Lease , SIC‑15 Operating Leases-Incentives and SIC‑27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognize most leases on the balance sheet. The Company adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of January 1, 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard recognized in retained earnings at the date of initial application. The Company elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Company also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (‘short-term leases’), and lease contracts for which the underlying asset is of low value (‘low-value assets’). The effect of adoption IFRS 16 as at January 1, 2019 is as follows: Assets Right-of-use assets 18,225 Deferred tax assets 613 Total assets 18,838 Liabilities Lease liabilities 20,089 Total liabilities 20,089 Total adjustment on equity: Retained earnings (1,251) a) Nature of the effect of adoption of IFRS16 The Company has lease contracts for properties. Before the adoption of IFRS 16, the Company classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease. The Company did not have finance leases as of December 31, 2018. In an operating lease, the leased property was not capitalized, and the lease payments were recognized as rent expense in profit or loss on a straight-line basis over the lease term. Any prepaid rent and accrued rent were recognized under Other assets and Trade payables, respectively. Upon adoption of IFRS 16, the Company applied a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The standard provides specific transition requirements and practical expedients, which have been applied by the Company. The Company recognized right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low-value assets. The right-of-use assets for most leases were recognized based on the carrying amount as if the standard had always been applied. Lease liabilities were recognized based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. The Company also applied the available practical expedients wherein it: ü Used an intrinsic discount rate, according to the characteristics for each lease; ü Relied on its assessment of whether leases are onerous immediately before the date of initial application; ü Applied the short-term leases and low-value assets exemptions to leases at the date of initial application; ü Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application; ü Used hindsight in determining the lease term where the contract contains options to extend or terminate the lease. The lease liabilities as at January 1, 2019 can be reconciled to the operating lease commitments as at December 31, 2018 as follows: Operating lease commitments as at December 31, 2018 27,397 Weighted average incremental borrowing rate as at January 1, 2019 11.04 % Discounted operating lease commitments at January 1, 2019 20,642 Less: Commitments related to sale of Escola de Aplicação São José dos Campos Ltda. (553) Lease liabilities as at January 1, 2019 20,089 The Company has the option, under some of its leases to lease the assets for additional terms. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy). IFRIC Interpretation 23 – Uncertainty over Income Tax Treatment The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following: · Whether an entity considers uncertain tax treatments separately · The assumptions an entity makes about the examination of tax treatments by taxation authorities · How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates · How an entity considers changes in facts and circumstances An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The Company applies significant judgement in identifying uncertainties over income tax treatments. Upon adoption of the Interpretation, the Company considered whether it has any uncertain tax positions. The Company applied the interpretation and concluded, based on its tax compliance that it is probable that its tax treatments will be accepted by the taxation authorities and did not have a significant impact on the consolidated financial statements.
Significant accounting judgements, estimates and assumptions	3 Significant accounting judgements, estimates and assumptions The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Accounting estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are recognized prospectively. Other disclosures relating to the Company’s exposure to risks and uncertainties includes: · Capital management – Note 27 · Financial instruments risk management – Notes 26 and 27 · Sensitivity analyses disclosures – Note 27 Estimates and assumptions The key assumptions about the future and other key sources of estimated uncertainty as of the reporting date that include a significant risk of a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances that arise and that are beyond the Company’s control. Such changes are reflected in the assumptions where they occur. Impairment of non-financial assets Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) or group of CGU exceeds its recoverable amount, defined as the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on data available from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a discounted cash flow model (“DCF” model). The cash flows are derived from the budget for the next five years and do not include restructuring activities to which the Company has not yet committed or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as to expected future cash-inflows and the growth rate used for extrapolation purposes. The Company determined that its operating segment is the cash generating unit. These estimates are most relevant to goodwill that are recognized by the Company. The key assumptions used to determine the recoverable amount for the different operating segments, including a sensitivity analysis, are disclosed and further explained in Note 14. Provision for expected credit losses of trade receivables and contract assets The Company uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for customer. The provision matrix is initially based on the Company’s historical observed default rates. The Company calibrates the matrix to adjust the historical credit loss experience with forward-looking information. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The information about the ECLs on the Company’s trade receivables and contract assets is disclosed in Note 7. Share-based payment Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled transactions, the Company uses the Black & Scholes model. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 18b. Taxes Deferred tax assets are recognized for deductible temporary differences and unused tax credits from net operating losses carryforward to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. The Company has R$ 4,066 (2018: R$ 10,427) of unrecognized unused tax loss carryforwards as of December 31, 2019 related to a subsidiary that has a history of losses. Such unused tax loss carryforwards do not expire and may not be used to offset taxable income of other subsidiaries of the Company. See Note 24. Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs into these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required to estimate fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. See Note 26 for further disclosures. Contingent consideration, resulting from business combinations, is valued at fair value as of the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial liability, it is subsequently remeasured at each reporting date. This determination of fair value is based on discounted cash flows. The key assumptions taken into consideration are the probability of meeting each performance target and the discount factor (see Notes 6 and 26 for additional information). Any contingent consideration is classified as financial instruments from acquisition of interests (see Note 16).

Significant accounting polici_3

Significant accounting policies (Tables)	12 Months Ended
	Dec. 31, 2019
Significant accounting policies
Summary of Company's Subsidiaries, Associates and Joint Ventures	The table below is a list of the Company’s subsidiaries, associates and joint venture: Principal Investment Direct and indirect interest Name activities Country type 2019 2018 2017 Arco Educação S.A. Holding Brazil Subsidiary 100.0 % 100.0 % — EAS Educação S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Barra Américas Editora Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Distribuidora de Material Didático Desterro Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Novagaúcha Editora e Livraria Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % SAS Sistema de Ensino Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Arco Ventures S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % SAS Livrarias Ltda. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % SAE Digital S.A. Educational content Brazil Subsidiary 100.0 % 100.0 % 100.0 % Escola de Aplicação São José dos Campos Ltda. Educational services Brazil Subsidiary — 69.6 % 69.6 % International School Serviços de Ensino, Treinamento e Editoração, Franqueadora S.A. Educational content Brazil Subsidiary 51.5 % 51.5 % 51.5 % NS Ventures Participações Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % NS Educação Ltda. Educational content Brazil Subsidiary — 100.0 % 100.0 % Nave à Vela Ltda. Educational content Brazil Subsidiary 51.0 % — — EEM Licenciamento de Programas Educacionais Ltda. Educational technology Brazil Subsidiary 100.0 % — — NLP Soluções Educacionais Ltda. Educational content Brazil Subsidiary 100.0 % — — Sistema Positivo de Ensino Educational content Brazil Subsidiary 100.0 % — — WPensar S.A. Educational technology Brazil Joint venture 25.0 % 25.0 % 25.0 % Geekie Desenvolvimento de Softwares S.A. Educational technology Brazil Associate 37.5 % 8.05 % 6.5 %
Summary of Estimated Useful Life of the Assets	Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows: Machinery and equipment 10 % Vehicles 20 % Furniture and fixtures 10 % IT equipment 20 % Facilities 10 % Leasehold improvements 20% to 33 %
Summary of Estimated useful life and lease term of Right of use Assets	Buildings 1 to 10 years Equipment 4 years
Summary of effect of adoption IFRS 16	The effect of adoption IFRS 16 as at January 1, 2019 is as follows: Assets Right-of-use assets 18,225 Deferred tax assets 613 Total assets 18,838 Liabilities Lease liabilities 20,089 Total liabilities 20,089 Total adjustment on equity: Retained earnings (1,251)
Summary of lease liabilities reconciled to the operating lease commitments	The lease liabilities as at January 1, 2019 can be reconciled to the operating lease commitments as at December 31, 2018 as follows: Operating lease commitments as at December 31, 2018 27,397 Weighted average incremental borrowing rate as at January 1, 2019 11.04 % Discounted operating lease commitments at January 1, 2019 20,642 Less: Commitments related to sale of Escola de Aplicação São José dos Campos Ltda. (553) Lease liabilities as at January 1, 2019 20,089

Business combinations and acq_2

Business combinations and acquisition of non-controlling interests (Tables)	12 Months Ended
	Dec. 31, 2019
Business combinations and acquisition of non-controlling interests
Summary of Fair Value of Identifiable Assets and liabilities as of Date of Each Acquisition	The fair value of the identifiable assets and liabilities as of the date of each acquisition was: Fair value as of the acquisition date 2019 2017 NS International EEM Nave Positivo Educação School Assets Cash and cash and equivalents 219 1,565 37,635 1 689 Trade receivables 126 896 72,780 — 10,576 Inventories — 897 13,664 — 1,837 Recoverable taxes 12 7 99 — 173 Deferred taxes — — 7,518 — — Other assets 14 284 1,526 — 470 Property and equipment 80 292 4,760 — 323 Right-of-use assets — — 5,241 — — Intangible assets 5,866 19,009 773,134 9,707 29,736 6,317 22,950 916,357 9,708 43,804 Liabilities Trade payables (48) (271) (12,463) — (2,327) Labor and social obligations (240) (1,444) (29,607) — (696) Taxes and contributions payable (109) (50) (2,937) — (119) Income taxes payable — (2) (22,643) — (410) Leases — — (5,374) — — Loans and financing (548) — — — — Other liabilities (156) (546) — — (340) (1,101) (2,313) (73,024) — (3,892) Total identifiable net assets at fair value 5,216 20,637 843,333 9,708 39,912 Goodwill arising on acquisition 13,069 37,557 830,028 28,826 27,598 Purchase consideration transferred 18,285 58,194 1,673,361 38,534 67,510 Cash paid 16,355 21,098 800,851 29,037 — Capital contribution — — — — 5,300 Forward contract of controlling interest at acquisition — 29,728 — — 30,144 Retained payments 1,930 — 872,510 — — Deferred payments — — — 9,497 — Fair value of previously held interest in a step acquisition — 7,368 — — 32,066 Analysis of cash flows on acquisition: Transaction costs of the acquisition (included in cash flows from operating activities) (649) (467) (27,389) (498) (85) Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities) (16,136) (19,533) (763,216) (29,036) 689
EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento")
Business combinations and acquisition of non-controlling interests
Summary of Valuation Techniques Used for Measuring Fair Value of Separately Identified Intangible Assets	The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer relationship Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Software Replacement cost The method considers the amount that an entity would have to pay to replace at the present time, according to its current worth. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence.
Nave a Vela Ltda. ("Nave")
Business combinations and acquisition of non-controlling interests
Summary of Consideration Transferred	The breakdown purchase consideration is as follows: At acquisition date Cash paid 21,098 Fair value of previously held investment 7,368 Fair value of forward contract 29,728 Consideration transferred 58,194
Summary of Valuation Techniques Used for Measuring Fair Value of Separately Identified Intangible Assets	The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer relationship Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence. Educational system Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational system being owned.
Sistema Positivo de Ensino ("Positivo")
Business combinations and acquisition of non-controlling interests
Summary of Valuation Techniques Used for Measuring Fair Value of Separately Identified Intangible Assets	The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer relationship Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence. Educational system Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational system being owned. Educational platform Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational platform being owned.
NS Educacao Ltda. ("NS Educacao")
Business combinations and acquisition of non-controlling interests
Summary of Valuation Techniques Used for Measuring Fair Value of Separately Identified Intangible Assets	The valuation techniques used for measuring the fair value of separate identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer list Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Educational system Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by educational system, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned. Non-compete agreement With-and-without method The With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence.
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")
Business combinations and acquisition of non-controlling interests
Summary of Consideration Transferred	The purchase consideration transferred totaled R$ 67,510, which breakdown is as follows: At acquisition date Capitalization of advances for future capital increases 5,300 Fair value of previously held investment 32,066 Fair value of forward contract 30,144 Consideration transferred 67,510
Summary of Calculation of Goodwill	The table below demonstrates the calculation of goodwill: At acquisition date Cash consideration and fair value of the forward contract 35,444 Fair value of previously held investment 32,066 Fair value of identified assets acquired and liabilities assumed (39,912) Goodwill 27,598
Summary of Valuation Techniques Used for Measuring Fair Value of Separately Identified Intangible Assets	The valuation techniques used for measuring the fair value of separately identified intangible assets acquired were as follows: Asset acquired Valuation technique Customer list Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets. Educational system Multi-period excess earning method The method considers the present value of net cash flows expected to be generated by educational system, by excluding any cash flows related to contributory assets. Trademarks Relief-from-royalty method The relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned.

Cash and cash equivalents (Tabl

Cash and cash equivalents (Tables)	12 Months Ended
	Dec. 31, 2019
Cash and cash equivalents.
Summary of Cash and Cash Equivalents	2019 2018 Cash and bank deposits 2,838 366 Cash equivalents and bank deposits in foreign currency (a) 23,346 3,615 Cash equivalents (b) 22,716 8,320 48,900 12,301 (a) Short-term deposits (mainly follow-on proceeds) maintained in U.S. dollar. (b) Cash equivalents correspond to financial investments in Bank Certificates of Deposit (“CDB”) of highly rated financial institutions. As of December 31, 2019, the average interest on these CDB are equivalent to 30.0% (2018: 61.7%) of the Interbank Certificates of Deposit (“CDI”). These funds are available for immediate use and have insignificant risk of changes in value.

Financial investments (Tables)

Financial investments (Tables)	12 Months Ended
	Dec. 31, 2019
Financial investments.
Summary of Financial Investments	2019 2018 Financial investments (a) 577,398 810,812 Financial investments in foreign currency 1,629 — Other 467 347 579,494 811,159 Current 574,804 806,789 Non-current 4,690 4,370 (a) Financial investments correspond to investments in non-exclusive funds managed by highly rated financial institutions. As of December 31, 2019, the average interest on these funds are equivalent to 99.86% (2018: 100.9%) of the CDI. The average CDI rate during the nine-month period was 0.48% per month.

Trade receivables (Tables)

Trade receivables (Tables)	12 Months Ended
	Dec. 31, 2019
Trade receivables.
Summary of Trade Receivables	2019 2018 From sales of educational content 354,968 146,114 From related parties (Note 10) 4,511 3,916 359,479 150,030 (-) Allowance for doubtful accounts (30,051) (13,419) 329,428 136,611
Summary of Aging of Trade Receivables	As of December 31, 2019, and 2018, the aging of trade receivables was as follows: 2019 2018 Neither past due nor impaired 299,159 127,387 Past due 60,320 22,643 1 to 60 days 18,931 8,931 61 to 90 days 6,865 3,868 91 to 120 days 6,414 1,978 121 to 180 days 9,904 3,173 More than 180 days 18,206 4,693 359,479 150,030
Summary of Allowance for Doubtful Accounts	The movement in the allowance for doubtful accounts for the years ended December 31, 2019 and 2018, was as follows: 2019 2018 2017 Balance at beginning of the year (13,419) (10,290) (5,386) Change in accounting policy – IFRS 9 — — (5,757) Additions (17,392) (9,588) (5,227) Receivables written off during the period as uncollectible 760 6,459 6,080 Balance at end of year (30,051) (13,419) (10,290)

Inventories (Tables)

Inventories (Tables)	12 Months Ended
	Dec. 31, 2019
Inventories
Summary of Inventories	2019 2018 Educational content 24,535 8,335 Educational content in progress (a) 12,837 6,205 Consumables and supplies 835 286 Inventories held by third parties 1,899 305 40,106 15,131 (a) Costs being incurred to develop educational content. These costs include incurred personnel costs and third parties’ services for editing educational content and related activities (graphic design, editing, proofreading and layout, among others).
Summary of Movement in Inventory Reserve	2019 2018 2017 Balance at beginning of the year (4,403) (2,047) (1,073) Inventory reserve (8,476) (7,252) (4,481) Write-off of inventories against reserve 6,362 4,896 3,507 Balance at end of year (6,517) (4,403) (2,047)

Recoverable taxes (Tables)

Recoverable taxes (Tables)	12 Months Ended
	Dec. 31, 2019
Recoverable taxes
Summary of Recoverable taxes	2019 2018 Withholding Income Tax (IRRF) on financial investments (a) 637 5,291 Recoverable IRPJ and CSLL 17,456 5,520 Recoverable PIS and COFINS 2,501 1,223 Other recoverable taxes 1,631 226 22,225 12,260 Current 15,612 11,227 Non-current 6,613 1,033 (a) Withholding income tax (IRRF) will be utilized to offset federal taxes payable.

Related parties (Tables)

Related parties (Tables)	12 Months Ended
	Dec. 31, 2019
Related parties
Summary of Balances and Transactions with Related Parties	The table below summarizes the balances and transactions with related parties: 2019 2018 Assets Trade receivables Livraria ASC Ltda. and Educadora ASC Ltda. (a) 4,511 3,916 4,511 3,916 Other assets General Atlantic Arco (Bermuda), L.P. (b) 4,109 — 4,109 — Loans to related parties WPensar S.A. (c) 1,298 1,226 Loans - Geekie (d) 4,231 — Debentures – Geekie (d) 10,582 — 16,111 1,226 Current 1,298 — Non-current 14,813 1,226 Advances from customers Livraria ASC Ltda. and Educadora ASC Ltda. (a) (1) — (1) — 2019 2018 2017 Net revenue Livraria ASC Ltda. and Educadora ASC Ltda. (a) 8,805 8,234 8,895 Expenses ASC Empreendimentos Ltda. and OSC Empreendimentos Ltda. (e) (8) (13) (21) Finance income WPensar S.A. (c) 72 — — Geekie (d) 813 — — 885 — — (a) Arco Ventures S. A. and International School sell educational content to Livraria ASC Ltda. and Educadora ASC Ltda., entities under common control of the Company’s controlling shareholders. The transactions are priced based on contract price at the sales date. The price applied is equivalent to that practiced in the market, being competitive transactions. (b) The amount refers to underwriting discounts and commissions incurred for issuing shares with the follow-on public of Class A shares of the selling shareholder GA, as described in Note 1. (c) The amounts receivable from WPensar S.A. are related to loan agreements and are indexed to the Brazilian Sistema Especial de Liquidação e Custódia (SELIC) interest rate and have a due date in July 2020. During 2019, the Company recognized R$ 72 of interest income. (d) On January 17, 2019, the Company entered into an agreement with its associated company, Geekie Desenvolvimento de Softwares S.A. (“Geekie”) buying 100,000 debentures issued at same date at par value of R$ 100.00 (hundred reais) each, totaling R$ 10,000. During 2019, the Company recognized R$ 582 of interest income. The debentures are due in June 2022 and bear interest of 110% of the CDI. The debentures are convertible in shares at the option of Arco at maturity similar to same terms of the call and put options presented in the investment agreement. On the same date, the Company lent R$ 4,000 to Geekie Partners S.A., the controlling shareholder of Geekie, through a loan agreement with payment due in June 2022, interest of 110% of the CDI, and with their entire interest on Geekie’s shares as collateral to the transaction. During 2019, the Company recognized R$ 231 of interest income. The transactions totaled R$ 14,000 and are intended to support Geekie’s working capital needs. (e) Arco Ventures S.A. leases a facility from OSC Empreendimentos Ltda., which are entities under common control of the Company’s controlling shareholder. The agreement was terminated in February 2020.
Summary of Key Management Personnel Compensation	Key management personnel compensation comprised the following: 2019 2018 2017 Short-term employee benefits 13,732 9,436 5,321 Stock options — 59,747 1,359 Restricted stock units 66,429 — — 80,161 69,183 6,680

Investments and interests in _2

Investments and interests in other entities (Tables)	12 Months Ended
	Dec. 31, 2019
Investments and interests in other entities.
Summary of Investment and Interests in Other Entities	(i) Investments and interests in other entities Reconciliation of carrying amount: 2019 2018 WPensar Geekie Nave Total Total At beginning of the period 3,237 8,625 — 11,862 12,654 Capital contributions — 10,000 4,200 14,200 — Acquisition from a minority shareholder — 27,653 — 27,653 — Gain of changes in ownership — 319 — 319 — Share of loss of equity-accounted investees (188) (1,072) (540) (1,800) (792) Consolidation on the acquisition of control — — (3,660) (3,660) — At end of the period 3,049 45,525 — 48,574 11,862 Percentage of ownership 25.0 % 37.5 % 51.0 %
Summary of Financial Information of Associates and Joint Venture	(ii) Selected financial information for associates and joint ventures Geekie WPensar December 31, 2019 Current assets 8,444 1,619 Non-current assets 17,983 1,687 Current liabilities 5,042 268 Non-current liabilities 10,964 1,240 Equity 10,421 1,798 Net revenue 14,266 4,200 Costs and expenses (*) (25,848) (3,985) Profit (loss) for the year (11,582) 215 December 31, 2018 Current assets 5,215 1,625 Non-current assets 12,174 1,414 Current liabilities 7,681 286 Non-current liabilities — 1,170 Equity 9,708 1,583 Net revenue 11,084 3,965 Costs and expenses (*) (18,299) (4,015) Loss for the year (7,215) (50) December 31, 2017 Current assets 8,937 1,615 Non-current assets 11,503 1,394 Current liabilities 5,276 284 Non-current liabilities — 1,091 Equity 15,164 1,634 Net revenue 14,329 3,687 Costs and expenses (*) (15,865) (3,598) Profit (loss) for the year (1,536) 89 (*) Comprise costs, selling and administrative expenses, finance result, other expenses and income tax and social contribution.

Property and equipment (Tables)

Property and equipment (Tables)	12 Months Ended
	Dec. 31, 2019
Property and equipment
Summary of Property and Equipment	Reconciliation of carrying amount: Machinery Furniture and and IT Leasehold equipment Vehicles fixtures equipment Facilities improvements Others Total Cost As of December 31, 2017 843 191 1,758 3,047 313 4,387 2,387 12,926 Additions 87 — 589 2,096 12 258 3,812 6,854 Disposals (34) — (51) (63) — (7) — (155) As of December 31, 2018 896 191 2,296 5,080 325 4,638 6,199 19,625 Additions 215 — 636 2,529 45 4,663 2,903 10,991 Disposals (17) (70) (895) (3,061) (290) (184) (1,076) (5,593) Business combination 213 — 517 2,775 — 1,627 — 5,132 Sale of Escola de Aplicação São José dos Campos Ltda. (50) — (201) (51) — (710) — (1,012) Write-offs — — — — — — (792) (792) As of December 31, 2019 1,257 121 2,353 7,272 80 10,034 7,234 28,351 Depreciation As of December 31, 2017 (170) (120) (324) (1,187) (65) (790) (1,191) (3,847) Depreciation charge for the year (84) (24) (203) (740) (35) (484) (878) (2,448) Disposals — — — 17 — — — 17 As of December 31, 2018 (254) (144) (527) (1,910) (100) (1,274) (2,069) (6,278) Depreciation charge for the period (91) (24) (254) (1,211) (34) (1,161) (1,580) (4,355) Depreciation of disposals 114 68 368 1,709 108 60 972 3,399 Sale of Escola de Aplicação São José dos Campos Ltda. 10 — 34 17 — 150 — 211 As of December 31, 2019 (221) (100) (379) (1,395) (26) (2,225) (2,677) (7,023) Net book value As of December 31, 2018 642 47 1,769 3,170 225 3,364 4,130 13,347 As of December 31, 2019 1,036 21 1,974 5,877 54 7,809 4,557 21,328

Leases (Tables)

Leases (Tables)	12 Months Ended
	Dec. 31, 2019
Leases
Summary of balance sheet showing the following amounts relating to leases	2019 Right-of-use assets Properties 21,518 Machinery and equipment 113 21,631 2019 Lease liabilities * Current 6,845 Non-current 19,012 25,857 * For the adjustments recognized on adoption of IFRS 16 on January 1, 2019, see Note 2.5.
Summary of carrying amounts of the Company's right-of-use assets and lease liabilities and the movements during the period	Right-of-use assets – Lease Properties Liabilities As at January 1, 2019 18,225 (20,089) Additions 4,502 (4,502) Lease modification (338) 338 Depreciation expense (5,999) — Business combination 5,241 (5,374) Interest expense — (1,489) Payments of lease liabilities — 4,407 Interest paid — 852 As at December 31, 2019 21,631 (25,857) Average annual depreciation rate 23.7 %

Intangible assets and goodwill

Intangible assets and goodwill (Tables)	12 Months Ended
	Dec. 31, 2019
Intangible assets and goodwill.
Summary of Intangible Assets and Goodwill	Rights on Customer Educational Software Educational Non-compete Goodwill contracts relationships system Copyrights license Trademarks platform agreement In Progress Total Cost As of December 31, 2017 89,634 15,263 23,045 36,656 4,948 1,393 19,115 3,942 1,097 — 195,093 Acquisitions — — — — 7,744 1,415 62 17,969 — 2,213 29,403 As of December 31, 2018 89,634 15,263 23,045 36,656 12,692 2,808 19,177 21,911 1,097 2,213 224,496 Corporate restructuring (Note 2.2) (53,521) — — — — — — — — — (53,521) Acquisitions — — — — 8,377 4,441 — 23,634 309 6,341 43,102 Disposals — — — — — — — (1,841) — — (1,841) Acquisitions through business combinations 880,654 — 183,926 214,567 — 11,163 336,121 24,728 6,897 20,607 1,678,663 Transfer — — — — — — — 19,555 — (19,555) — As of December 31, 2019 916,767 15,263 206,971 251,223 21,069 18,412 355,298 87,987 8,303 9,606 1,890,899 Amortization As of December 31, 2017 — (2,767) (4,924) (6,127) (1,321) (273) (2,670) (1,473) (55) — (19,610) Amortization — (1,182) (2,636) (6,589) (2,618) (375) (1,140) (2,387) (219) — (17,146) As of December 31, 2018 — (3,949) (7,560) (12,716) (3,939) (648) (3,810) (3,860) (274) — (36,756) Amortization — (1,342) (6,450) (9,518) (7,743) (2,307) (4,431) (10,449) (536) — (42,776) Amortization of disposals — — — — — — — 536 — — 536 As of December 31, 2019 — (5,291) (14,010) (22,234) (11,682) (2,955) (8,241) (13,773) (810) — (78,996) Net book value As of December 31, 2018 89,634 11,314 15,485 23,940 8,753 2,160 15,367 18,051 823 2,213 187,740 As of December 31, 2019 916,767 9,972 192,961 228,989 9,387 15,457 347,057 74,214 7,493 9,606 1,811,903
Summary of Carrying Amount of Goodwill by Operating Segment	The carrying amount of goodwill by operating segment was: 2019 2018 Core 755,539 62,036 Supplemental 161,228 27,598 916,767 89,634
Summary of Fair Value Calculations of Discounted Cash Flow Model	The value -in-use calculations were based on the discounted cash flow model and are based on the following assumptions for those segments: Budget period Growth rate beyond budget Gross margin Growth rate period Discount rate 2019 2018 2019 2018 2019 2018 2019 2018 Core 76.7 % 78.8 % 11.1 % 21.1 % 4.3 % 4.0 % 12.7 % 15.7 % Supplemental 81.0 % 87.4 % 18.3 % 33.0 % 4.3 % 4.0 % 14.5 % 17.6 %
Summary of Estimated Useful lives of Intangible Assets	The estimated useful lives of intangible assets for the years ended December 31, 2019, 2018 and 2017 are as follows: Years Rights on contracts 10 Customer relationships 5 to 16 Educational system 3 to 10 Copyrights 3 Software license 2 a 5 Trademarks 10 to 20 Educational platform 3 a 10 Non-compete agreement 2 a 5

Loans and financing (Tables)

Loans and financing (Tables)	12 Months Ended
	Dec. 31, 2019
Loans and financing
Schedule of loans and financing	Interest rate Maturity 2019 Bank loan 100% CDI + 0.7% pa October/2020 98,561
Summary of movement in loans and financing	2019 Balance at beginning of the year — Additions 100,000 Business combination 548 Loan cost (2,426) Interest expense 1,002 Payment of loans and financing (563) Balance at end of year 98,561

Financial instruments from ac_2

Financial instruments from acquisition of interests (Tables)	12 Months Ended
	Dec. 31, 2019
Financial instruments from acquisition of interests.
Summary of Contingent Assets and Liabilities and Related Derivative Instruments	The breakdown of contingent consideration assets and liabilities and related derivative instruments from business combinations and acquisition of investments in associates and joint ventures is as follows: 2019 2018 Assets Derivative financial instruments Investment in Geekie (Note 11) 32,152 23,346 Investment in WPensar (Note 11) 3,794 3,284 35,946 26,630 Current 3,794 — Non-current 32,152 26,630 2019 2018 Liabilities Derivative financial instruments Investment in Geekie (Note 11) (31,626) (22,037) Investment in WPensar (Note 11) (2,314) (3,006) Deferred revenue in Escola de Aplicação São José dos Campos — (54) (33,940) (25,097) Current — (51) Non-current (33,940) (25,046)

Accounts payable to selling s_2

Accounts payable to selling shareholders (Tables)	12 Months Ended
	Dec. 31, 2019
Accounts payable to selling shareholders
Summary of Liabilities of Accounts Payable From Business Combination and Investments in Associates	The breakdown of the liabilities regarding balances of accounts payable from business combination and investments in associates is as follows: 2019 2018 Accounts payable to selling shareholders Acquisition of International School (a) (297,722) (174,410) Acquisition of NS Educação Ltda. (b) (6,461) (6,971) Acquisition of Escola em Movimento (c) (1,992) — Acquisition of Nave à Vela (d) (30,946) — Acquisition of Positivo (e) (879,111) — (1,216,232) (181,381) Current (117,959) (830) Non-current (1,098,273) (180,551) (a) The financial liability is recorded at the present value of the estimated amount payable to the non-controlling shareholder upon the exercise of the put or call options and discounted to present value using an estimated interest rate of 14.5% (17.6% in 2018). During 2019 the Company recognized R$ 33,909 of interest. The amount payable is estimated based on projected EBITDA for the 2019 and 2020 school year. During the fourth quarter of 2019, the Company had a better visibility about next year´s ACV bookings and its increase, it was necessary to perform a review on previous operations projections, that resulted in an increase on the projected EBITDA. Based on the new projected numbers for 2019 and 2020, the accounts payable increased by R$89,403. See Note 28 for more information. (b) This amount was retained for any losses, which will be released in annual installments until December 31, 2022. The amount is being adjusted by the interest from Interbank certificates of deposit (CDI). (c) This amount was retained for any losses, which will be released in two annual installments on the first and second anniversary of the acquisition. The amount is being adjusted by the basic interest rate (SELIC). (d) This amount is related to the remaining acquisition of 49% interest in Nave and will occur over the next two years (subject to price adjustments, net of debt at each closing date). This amount is recorded at the present value using an estimated interest rate of 14.54%. During 2019, the Company recognized R$ 1,218 of interest. The next tranche is payable on February 15, 2021, in this date Arco Ventures S.A. will acquire 24% interest, for the 24% of Nave’s revenues from October 1, 2019 to September 30, 2020 multiplied by 5.3, net of debt. The last tranche is payable on February 15, 2022, in this date Arco Ventures S.A. will acquire 25% interest, for 25% of Nave’s revenues from October 1, 2020 to September 30, 2021 multiplied by 3, net of debt. (e) The amount of the contract is updated by CDI from November 1, 2019 to December 31, 2019.

Labor and social obligations (T

Labor and social obligations (Tables)	12 Months Ended
	Dec. 31, 2019
Labor and Social Obligations
Summary of claims and benefits paid	2019 2018 Bonuses 28,045 2,897 Payroll and social charges 17,763 4,519 Payroll accruals 18,998 6,597 Other labor 6,506 1,875 71,312 15,888 Current 68,511 15,888 Non-current 2,801 —
Arco plan
Labor and Social Obligations
Summary of assumptions used to determine the fair value of options	The following table list the inputs to the model used for the Arco plan: Dividend yield (%) 2.41 Expected volatility (%) 186.61 Risk-free interest rate (%) 8.01 Expected life of share options (years) 6.00 Weighted average share price (R$) 12.67 Model used Black & Scholes
Summary of movements of share options	The following table illustrates the number and movements of share options during the period: Average exercise Number of price per share share options option Outstanding at December 31, 2018 1,091,039 12.56 Exercised (1,091,039) 12.68 Outstanding at December 31, 2019 — —
International school plan
Labor and Social Obligations
Summary of assumptions used to determine the fair value of options	The following table details the assumptions used to determine the fair value of the share options under the International School share option plans: Date of grant 08/04/2017 Dividend yield (%) 0.00 % Expected volatility (%) 380.36 % Risk-free interest rate (%) 8.62 % Expected life of share options (years) 2.74 Weighted average share price (reais) on the grant date 10.65 Model used Black & Scholes
RSU plan
Labor and Social Obligations
Schedule of restricted stocks issued by vesting date	Final vesting Quantity of date stocks 28/09/2019 193,563 30/06/2020 3,086 28/09/2020 193,563 28/09/2021 193,563 Total 583,775
Summary of movements of restricted stock	The following table reflects the movements from the grant date until December 31, 2019: Number of share options Outstanding at December 31, 2018 — Granted 583,775 Exercised (188,089) Effectively forfeited (36,913) Estimated forfeited (21,588) Outstanding at December 31, 2019 337,185
Summary of equity instruments on grant date fair value	Total shares Total shares Average fair value at Grant date granted outstanding grant date Average 30/04/2019 542,760 310,516 68,800 126.76 30/06/2019 1,543 1,450 274 177.71 30/06/2019 1,543 1,450 319 206.66 15/10/2019 37,929 23,769 7,593 200.18 Total 583,775 337,185 76,986

Equity (Tables)

Equity (Tables)	12 Months Ended
	Dec. 31, 2019
Equity.
Schedule of Share capital outstanding	December 31, 2018 shares outstanding 50,261,027 Share-based compensation plan (Note 18) 1,091,039 Restricted Stock Units (Note 18) 188,089 Restricted Stock Unit withheld (a) (51,723) Underwritten public offering of Class A common shares (Note 1) 3,450,656 December 31, 2019 shares outstanding 54,939,088 (a) A portion of the shares was withheld to pay income taxes of the beneficiaries.

Earnings (loss) per share (EP_2

Earnings (loss) per share (EPS) (Tables)	12 Months Ended
	Dec. 31, 2019
Earnings (loss) per share (EPS)
Summary of Profit (Loss) Attributable to Equity Holders of the Parent and the Share Data Used in the Basic and Diluted EPS Computations	The following table reflects the profit (loss) attributable to equity holders of the parent and the share data used in the basic and diluted EPS computations: 2019 2018 2017 Class A Class B Total Class A Class B Total Class A Class B Total Profit (loss) attributable to equity holders of the parent (4,379) (5,052) (9,431) (37,047) (45,333) (82,380) 19,902 24,353 44,255 Weighted average number of common shares outstanding (thousand) 23,938 27,614 22,603 27,658 22,603 27,658 Effects of dilution from: Share-based compensation plan (thousands) 337 — 153 — 931 — Basic earnings (loss) per share - R$ (0.18) (0.18) (1.64) (1.64) 0.88 0.88 Diluted earnings (loss) per share - R$ (0.18) (0.18) (1.64) (1.64) 0.85 0.85

Revenue (Tables)

Revenue (Tables)	12 Months Ended
	Dec. 31, 2019
Revenue
Summary of Company's Net Revenue	2019 2018 2017 Educational content 625,150 407,599 277,596 Other 2,820 4,102 2,385 Deductions Taxes (275) (264) (154) Returns and discounts (54,858) (30,456) (35,445) Net revenue 572,837 380,981 244,382 2019 2018 2017 Segments Core Supplemental Total Core Supplemental Total Core Supplemental Total Type of goods or service Educational content 432,663 137,516 570,179 299,203 77,940 377,143 216,661 25,425 242,086 Other 46 2,612 2,658 3,828 10 3,838 2,296 — 2,296 Total net revenue from contracts with customers 432,709 140,128 572,837 303,031 77,950 380,981 218,957 25,425 244,382 Timing of revenue recognition Transferred at a point in time 432,709 140,128 572,837 303,031 77,950 380,981 218,957 25,425 244,382 Total net revenue from contracts with customers 432,709 140,128 572,837 303,031 77,950 380,981 218,957 25,425 244,382

Expenses by nature (Tables)

Expenses by nature (Tables)	12 Months Ended
	Dec. 31, 2019
Expenses by Nature
Summary of Expenses by Nature	2019 2018 2017 Content providing 61,953 41,551 34,452 Operations personnel 12,500 11,477 10,979 Inventory reserves 8,476 7,252 4,481 Freight 14,569 7,687 4,087 Depreciation and amortization 15,311 5,869 3,161 Other 4,449 6,909 1,357 Cost of sales 117,258 80,745 58,517 Sales personnel 87,352 49,041 26,721 Depreciation and amortization 23,573 11,939 9,799 Sales & marketing 31,208 17,931 9,319 Customer support 30,755 17,274 8,173 Allowance for doubtful accounts 17,392 9,588 5,227 Real estate rentals 1,728 1,923 1,751 Other 7,772 5,574 4,324 Selling expenses 199,780 113,270 65,314 Corporate personnel 53,443 39,382 24,633 Third party services 43,415 14,269 7,814 Real estate rents 2,613 3,429 1,625 Travel expenses 3,439 2,891 2,034 Tax expenses 2,331 2,858 1,716 Software licenses 1,487 1,098 1,128 Share-based compensation plan 66,978 60,297 1,890 Depreciation and amortization 9,430 1,786 1,328 Other 8,302 3,744 6,763 General and administrative expenses 191,438 129,754 48,931 Total 508,476 323,769 172,762

Finance result (Tables)

Finance result (Tables)	12 Months Ended
	Dec. 31, 2019
Finance result
Summary of Financial Result	2019 2018 2017 Income from financial investments 18,443 11,633 11,415 Changes in fair value of financial investments (a) 28,886 4,322 — Changes in fair value of derivative instruments (b) 18,599 19,839 258 Foreign exchange gains 1,745 138 — Interest income 1,042 — — Other 3,332 686 858 Finance income 72,047 36,618 12,531 Changes in fair value of derivative instruments (b) (18,126) (19,180) (6,915) Changes in accounts payable to selling shareholders (Note 17) (89,403) (130,378) — Interest in acquisition of investments (c) (42,206) (9,781) (11,179) Financial discounts granted (3,343) (1,911) (1,266) Foreign exchange loss (2,300) (34,573) — Interest in lease liabilities (1,489) — — Other (13,988) (2,972) (1,029) Finance costs (170,855) (198,795) (20,389) Finance result (98,808) (162,177) (7,858) (a) Refers to gains on financial investments measured at FVPL. (b) Refers to changes in the fair value of derivative financial instruments, comprised of the put and call options from business acquisitions and investments in associates and joint ventures. (c) Refer to interest expense on liabilities related to business combinations and investments in associates.

Income taxes (Tables)

Income taxes (Tables)	12 Months Ended
	Dec. 31, 2019
Income taxes
Reconciliation of Income Tax Expense	2019 2018 2017 Profit (loss) before income taxes (42,534) (100,901) 66,356 Combined statutory income taxes rate - % 34 % 34 % 34 % Income tax benefit (expense) at statutory rates 14,462 34,306 (22,561) Reconciliation adjustments: Share of loss of equity-accounted investees (a) (612) (269) (240) Effect of presumed profit of subsidiaries (b) 18,593 11,080 907 Permanent differences (c) — (26,097) — Other additions (exclusions), net 660 (1,035) (822) 33,103 17,985 (22,716) Current (46,850) (26,553) (31,010) Deferred 79,953 44,538 8,294 Income taxes benefit (expense) 33,103 17,985 (22,716) Effective rate % 17.8 % 34.2 % (a) Refers to the effect of 34% on the share of profit (loss) of investees for the year. (b) Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Company’s subsidiaries adopted this tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries. (c) Refers mainly to permanent differences of non-deductible expenses from share-based compensation plan and foreign exchange loss and others.
Summary of Changes in the Deferred Tax Assets and Liabilities	The changes in the deferred tax assets and liabilities are as follows: Change in As of Change in As of accounting January Profit accounting January Profit Business 2017 practice 1, 2018 or loss Equity 2018 practice 1, 2019 or loss combination Equity 2019 Deferred tax assets Tax losses carryforward 3,607 — 3,607 757 — 4,364 — 4,364 11,919 — — 16,283 Temporary differences Financial instruments from acquisition of interests 7,879 — 7,879 51,287 — 59,166 — 59,166 47,563 — — 106,729 Other temporary differences 3,634 1,450 5,084 1,501 — 6,585 613 7,198 14,610 7,517 — 29,325 Share base compensation 2,217 — 2,217 (2,217) — — — — 7,960 — — 7,960 Tax benefit from tax deductible goodwill — — — — 46,314 46,314 — 46,314 (2,009) — (29,417) 14,888 Amortization of intangible assets 1,205 — 1,205 77 — 1,282 — 1,282 5,391 — — 6,673 Total deferred tax assets 18,542 1,450 19,992 51,405 46,314 117,711 613 118,324 85,434 7,517 (29,417) 181,858 Deferred tax liabilities Financial instruments from acquisition of interests (12,414) — (12,414) (5,752) — (18,166) — (18,166) (5,707) — — (23,873) Other temporary differences (348) — (348) (1,115) — (1,463) — (1,463) 226 — — (1,237) Total deferred tax liabilities (12,762) — (12,762) (6,867) — (19,629) — (19,629) (5,481) — — (25,110) Deferred tax assets (liabilities), net 5,780 1,450 7,230 44,538 46,314 98,082 613 98,695 79,953 7,517 (29,417) 156,748 Deferred tax assets 5,860 7,310 99,460 100,073 156,748 Deferred tax liabilities (80) (80) (1,378) (1,378) —

Segment information (Tables)

Segment information (Tables)	12 Months Ended
	Dec. 31, 2019
Segment information
Summary of Operating Segments	2019 Total Adjustments reportable and Core Supplemental segments eliminations Total Revenue 433,372 139,465 572,837 — 572,837 Cost of sales (97,513) (19,745) (117,258) — (117,258) Gross profit 335,859 119,720 455,579 — 455,579 Selling expenses — — — — (199,780) General and administrative expenses — — — — (191,438) Other income (expenses), net — — — — (6,287) Operating profit — — — — 58,074 Finance income — — — — 72,047 Finance costs — — — — (170,855) Share of loss of equity-accounted investees — — — — (1,800) Loss before income taxes — — — — (42,534) Income taxes income — — — — 33,103 Loss for the year — — — — (9,431) Other disclosures — — — — — Depreciation and amortization 43,854 4,460 48,314 — 48,314 Investments in associates and joint ventures 48,574 — 48,574 — 48,574 Capital expenditures 45,851 8,242 54,093 — 54,093 2018 Total Adjustments reportable and Core Supplemental segments eliminations Total Revenue 303,031 77,950 380,981 — 380,981 Cost of sales (70,903) (9,842) (80,745) — (80,745) Gross profit 232,128 68,108 300,236 — 300,236 Selling expenses (87,186) (26,084) (113,270) — (113,270) Segment profit 144,942 42,024 186,966 — 186,966 General and administrative expenses — — — — (129,754) Other income (expenses), net — — — — 4,856 Operating profit — — — — 62,068 Finance income — — — — 36,618 Finance costs — — — — (198,795) Share of loss of equity-accounted investees — — — — (792) Loss before income taxes — — — — (100,901) Income taxes income — — — — 17,985 Loss for the year — — — — (82,916) Other disclosures Depreciation and amortization 17,997 1,597 19,594 — 19,594 Investments in associates and joint ventures 11,862 — 11,862 — 11,862 Capital expenditures 28,165 8,092 36,257 — 36,257 2017 Total Adjustments reportable and Core Supplemental segments eliminations Total Revenue 218,957 25,425 244,382 — 244,382 Cost of sales (54,317) (4,200) (58,517) — (58,517) Gross profit 164,640 21,225 185,865 — 185,865 Selling expenses (56,318) (8,996) (65,314) — (65,314) Segment profit 108,322 12,229 120,551 — 120,551 General and administrative expenses — — — — (48,931) Other income (expenses), net — — — — 3,299 Operating profit — — — — 74,919 Finance income — — — — 12,531 Finance costs — — — — (20,389) Share of loss of equity-accounted investees — — — — (705) Profit before income taxes — — — — 66,356 Income taxes expense — — — — (22,716) Profit for the year — — — — 43,640 Other disclosures Depreciation and amortization 12,650 1,638 14,288 — 14,288 Investments in associates and joint ventures 12,654 — 12,654 — 12,654 Capital expenditures 7,183 4,200 11,383 — 11,383
Summary of assets and liabilities are allocated based on the operations of the segment	These assets and liabilities are allocated based on the operations of the segment. Total Adjustments reportable and Core Supplemental segments eliminations Total As of December 31, 2019 Total assets 2,999,497 176,196 3,175,693 (14,270) 3,161,423 Total liabilities 1,535,695 45,188 1,580,883 (14,270) 1,566,613 As of December 31, 2018 Total assets 1,273,107 62,006 1,335,113 (235) 1,334,878 Total liabilities 254,744 10,485 265,229 (235) 264,994

Financial instruments (Tables)

Financial instruments (Tables)	12 Months Ended
	Dec. 31, 2019
Financial instruments
Summary of Financial Assets	The Company holds the following financial instruments: Financial assets Assets at FVPL Assets at amortized cost Total December 31, 2019 Cash and cash equivalents 48,900 — 48,900 Financial investments 498,584 80,910 579,494 Trade receivables — 329,428 329,428 Financial instruments from acquisition of interests 35,946 — 35,946 Related parties — 16,111 16,111 Other assets — 4,109 4,109 583,430 430,558 1,013,988 Assets at FVPL Assets at amortized cost Total December 31, 2018 Cash and cash equivalents 12,301 — 12,301 Financial investments 2,370 808,789 811,159 Trade receivables — 136,611 136,611 Financial instruments from acquisition of interests 26,630 — 26,630 Related parties — 1,226 1,226 41,301 946,626 987,927
Summary of Financial Liabilities	Liabilities at Financial liabilities Liabilities at FVPL amortized cost Total December 31, 2019 Trade payables — 34,521 34,521 Financial instruments from acquisition of interests 33,940 — 33,940 Accounts payable to selling shareholders 328,668 887,564 1,216,232 Leases liabilities — 25,857 25,857 Loans and financing — 98,561 98,561 362,608 1,046,503 1,409,111 December 31, 2018 Trade payables — 14,845 14,845 Financial instruments from acquisition of interests 25,097 — 25,097 Accounts payable to selling shareholders — 181,381 181,381 25,097 196,226 221,323
Summary of Financial Assets and Liabilities Recognized at Fair Value	Assets and liabilities are measured and recognized at fair value as follows: Hierarchy 2019 2018 Financial assets Cash and cash equivalents Level 2 48,900 12,301 Financial investments Level 2 498,584 2,370 Derivative financial instruments Level 3 35,946 26,630 Financial liabilities Derivative financial instruments Level 3 33,940 25,097 Accounts payable to selling shareholders Level 3 328,668 —
Summary of Fair Value Measurements using significant unobservable inputs (level 3)	The following table presents the changes in level 3 items for the years ended December 31, 2019, 2018 and 2017. Financial instruments Financial instruments from acquisition of from acquisition of Accounts payable to Recurring fair value measurements interests (assets) interests (liabilities) selling shareholders Balance as of December 31, 2016 20,610 (30,076) — Acquisitions — (364) (30,144) Disposals (4,542) 19,852 — Interest expense — — (6,486) Deferred revenue in Escola de Aplicação São José dos Campos — 51 — Losses recognized in statement of income (3,557) (3,100) — Balance as of December 31, 2017 12,511 (13,637) (36,630) Payment of capital increase in Geekie — 2,000 — Changes in accounts payable to selling shareholders — — (129,430) Interest expense — — (8,350) Deferred revenue in Escola de Aplicação São José dos Campos — 50 — Gains (losses) recognized in statement of income (loss) 14,119 (13,510) — Balance as of December 31, 2018 26,630 (25,097) (174,410) Acquisition of Nave à Vela — — (58,194) Payment of acquisition of Nave à Vela — — 21,098 Changes in accounts payable to selling shareholders — — (89,403) Interest expense — — (35,127) Deferred revenue in Escola de Aplicação São José dos Campos Ltda. — 54 — Fair value held in step acquisitions — — 7,368 Gains (loss) recognized in statement of income 9,316 (8,897) — Balance as of December 31, 2019 35,946 (33,940) (328,668)

Risk (Tables)

Risk (Tables)	12 Months Ended
	Dec. 31, 2019
Risk
Summary of Company's Exposure to Foreign Currency Risk	The Company’s exposure to foreign currency risk as of December 31, 2019 and December 31, 2018, was as follows: 2019 2018 Cash and cash equivalents (Note 5) 23,346 3,615 Financial investments 1,629 —
Summary of Sensitivity Analysis for the Cash and Cash Equivalents With Subject to Foreign Exchange Rate	The table below set forth the sensitivity analysis as of December 31, 2019, for the amount of cash and cash equivalents and financial investments denominated in U.S. dollar of US$ 6,197 thousand: Base scenario Scenario I Scenario II Exchange rate: Exchange rate: Exchange rate: R$ 4.0301 R$ 4.4331 R$ 3.6271 Finance income (costs) — R$ 2,497 R$ (2,497)
Maturity Profile of Financial Liabilities Based on Contractual Undiscounted Payments	The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted amounts: Less More On than 3 3 to 12 1 to 5 than 5 As of December 31, 2019 demand months months years years Total Trade payables — 34,521 — — — 34,521 Lease liabilities — 2,037 4,808 19,012 — 25,857 Loans and financing — — 98,561 — — 98,561 Financial instruments from — — — 33,940 — 33,940 acquisition of interests Accounts payable to selling Shareholders — — 117,959 1,098,273 — 1,216,232 — 36,558 221,328 1,151,225 — 1,409,111 Less More On than 3 3 to 12 1 to 5 than 5 As of December 31, 2018 demand months months years years Total Trade payables — 14,845 — — — 14,845 Financial instruments from — 13 38 25,046 — 25,097 acquisition of interests Accounts payable to selling Shareholders — — 830 180,551 — 181,381 — 14,858 868 205,597 — 221,323
Summary of Changes in Liabilities Arising From Financing Activities	Changes in liabilities arising from financing activities January 1, 2017 Cash flows Other December 31, 2017 Cash flows Other December 31, 2018 Dividends payable 17,843 (75,053) 67,721 10,511 (85,000) 74,489 — Total 17,843 (75,053) 67,721 10,511 (85,000) 74,489 — Change in As of December 31, accounting January 1, Cash December 31, 2018 practice 2019 flows Other 2019 Leases — 20,089 20,089 (5,259) 11,027 25,857 Loans and financing — — — 97,011 1,550 98,561 Total — 20,089 20,089 91,752 12,577 124,418
Interest rate risk
Risk
Summary of the Scenarios Estimated by Management and the Effect on Profit Before Income Taxes	The table below shows a summary of the scenarios estimated by Management and the effect on profit before income taxes: Exposure +10% -10% Cash, bank deposits and cash equivalents 25,554 108 (108) Financial investments 577,865 2,433 (2,433) Accounts payable to selling shareholders 879,111 3,701 (3,701) Related parties 14,813 62 (62) Loans and financing 98,561 415 (415)
Other market risk
Risk
Summary of the Scenarios Estimated by Management and the Effect on Profit Before Income Taxes	The table below shows a summary of the scenarios estimated: 10 % % Revenue 23,413 (23,413) 5 % % WACC 3,510 (3,510)

Commitments and contingencies (

Commitments and contingencies (Tables)	12 Months Ended
	Dec. 31, 2019
Commitments and contingencies
Summary of Rollforward of Legal Proceedings	Labor Taxes Total Balance at December 31, 2017 — — — Additions 17 124 141 Reversals — (10) (10) Balance at December 31, 2018 17 114 131 Additions 209 145 354 Reversals (104) (130) (234) Balance at December 31, 2019 122 129 251
Summary of Litigation Settlement	2019 2018 Civil (a) 6,113 4,425 Labor (b) 1,096 745 Total 7,209 5,170 (a) The civil proceedings relate mainly to customer claims, including those related to the early termination of certain agreements, among others. (b) The labor proceedings to which the Company is a party were filed by former employees or suppliers and third-party service providers’ employees seeking joint liability for the acts of the Company’s suppliers and service providers.

Transactions not involving ca_2

Transactions not involving cash (Tables)	12 Months Ended
	Dec. 31, 2019
Transactions not involving cash
Summary of Non-cash Activities, Which Are Not Included in Statements of Cash Flow	During the years ended December 31, 2019, 2018 and 2017, the Company carried out the following non-cash activities, which are not reflected in the statement of cash flows: 2019 2018 2017 Share issuance costs – unpaid — 674 — Tax benefit from tax deductible goodwill (Note 19d) (46,314) 46,314 — Investing - accounts payable to selling shareholders — — 58,003 Investing - derivative financial instruments (Note 2.2) 14,597 — — Business combinations - derivative financial instruments (Note 2.2) 38,924 — — Lease adoption (Note 2.5) 1,251 — — Forward contract - Nave (Note 4) 29,728 — — Retained payments from business combination (Note 4) 874,440 — — Acquisition from business combination (Note 4) 39,419

Corporate Information (Details)

Corporate Information (Details) $ / shares in Units, R$ in Thousands, $ in Thousands	Oct. 29, 2019USD ($)$ / sharesshares	Oct. 29, 2019BRL (R$)shares	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)
Follow-on public offering
Audit, consulting and legal services incurred related to the offering | R$			R$ 18223	R$ 79205
Follow-on public offering
Follow-on public offering
Number of shares issued	7,719,503	7,719,503
Gross proceeds from issuance of shares | $	$ 331,900
Net proceeds from issuance shares	143,908	R$ 574767
Underwriting discounts and commissions	$ 3,709	14,835
Audit, consulting and legal services incurred related to the offering | R$		R$ 3387
Follow-on public offering | Class A common shares
Follow-on public offering
Number of shares issued	3,450,656	3,450,656
Public offering price | $ / shares	$ 43
Follow-on public offering | Class A common shares | Selling Shareholders
Follow-on public offering
Number of shares issued	4,268,847	4,268,847
Over allotment option | Class A common shares
Follow-on public offering
Number of shares issued	661,112	661,112
Over allotment option | Class A common shares | GA Holdings
Follow-on public offering
Maximum number of additional shares authorized for issuance	1,157,925	1,157,925

Significant Accounting Polici_4

Significant Accounting Policies - Significant events during the year (Details) R$ in Thousands	Jan. 02, 2019BRL (R$)installment	Oct. 31, 2019	May 31, 2019	Dec. 31, 2019BRL (R$)	Dec. 31, 2018	Dec. 31, 2017	May 01, 2019BRL (R$)	Apr. 29, 2019	Mar. 31, 2019BRL (R$)	Feb. 01, 2019BRL (R$)
Significant Accounting Policies
Gain on sale of investment				R$ 3286
Escola de Aplicacao Sao Jose dos Campos Ltda.
Significant Accounting Policies
Transaction price	R$ 3741
Number of quarterly installments in which the transaction price will be received | installment	16
Gain on sale of investment	R$ 3286
Equity interest held in subsidiary					69.60%	69.60%
SAE Digital S.A
Significant Accounting Policies
Equity interest acquired						30.00%
Equity interest held in subsidiary				100.00%	100.00%	100.00%
Deferred tax asset										R$ 5135
Deductible goodwill										14,597
Net effect accounted for in equity										R$ 9462
Novagaucha Editora e Livraria Ltda.
Significant Accounting Policies
Goodwill recorded on acquisition									R$ 4330
NS Ventures Participacoes Ltda. and NS Educacao Ltda.
Significant Accounting Policies
Deferred tax asset							R$ 11762
Deductible goodwill							34,594
Net effect accounted for in equity							R$ 22832
NS Ventures Participacoes Ltda.
Significant Accounting Policies
Equity interest held in subsidiary					100.00%	100.00%
NS Educacao Ltda. ("NS Educacao")
Significant Accounting Policies
Equity interest acquired						100.00%
Equity interest held in subsidiary					100.00%	100.00%
Nave a Vela Ltda. ("Nave")
Significant Accounting Policies
Percentage of equity interest acquired			13.20%
Equity interest held in subsidiary		51.00%		51.00%
EEM Licenciamento de Programas Educacionais Ltda
Significant Accounting Policies
Equity interest acquired								100.00%
Equity interest held in subsidiary				100.00%
NLP Solucoes Educacionais Ltda.
Significant Accounting Policies
Equity interest held in subsidiary				100.00%
Geekie Desenvolvimento de Softwares S.A.
Significant Accounting Policies
Equity interest acquired				31.00%
Equity interest held in subsidiary				37.50%

Significant Accounting Polici_5

Significant Accounting Policies - Summary of Company's Subsidiaries, Associates and Joint Ventures (Details)	Jul. 02, 2018	Oct. 31, 2019	Apr. 30, 2015	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Geekie Desenvolvimento de Softwares S.A.
Significant Accounting Policies
Percentage of ownership, Subsidiary				37.50%
Direct and indirect interest, Associate	8.05%				6.54%
WPensar S.A.
Significant Accounting Policies
Percentage of ownership, Subsidiary				25.00%
Direct and indirect interest, Joint Venture			25.00%
Arco Educacao S.A.
Significant Accounting Policies
Principal activities				Holding
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%
EAS Educacao S.A.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
Barra Americas Editora Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
Distribuidora de Material Didatico Desterro Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
Novagaucha Editora e Livraria Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary					100.00%	100.00%
SAS Sistema de Ensino Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
Arco Ventures S.A.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
SAS Livrarias Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
SAE Digital S.A
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%	100.00%	100.00%
Escola de Aplicacao Sao Jose dos Campos Ltda.
Significant Accounting Policies
Principal activities				Educational services
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary					69.60%	69.60%
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				51.50%	51.50%	51.50%
NS Ventures Participacoes Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary					100.00%	100.00%
NS Educacao Ltda. ("NS Educacao")
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary					100.00%	100.00%
Nave a Vela Ltda. ("Nave")
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary		51.00%		51.00%
EEM Licenciamento de Programas Educacionais Ltda
Significant Accounting Policies
Principal activities				Educational technology
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%
NLP Solucoes Educacionais Ltda.
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%
Sistema Positivo de Ensino ("Positivo")
Significant Accounting Policies
Principal activities				Educational content
Country of Incorporation, Subsidiary				Brazil
Percentage of ownership, Subsidiary				100.00%
WPensar S.A
Significant Accounting Policies
Principal activities				Educational technology
Country of Incorporation, Joint Venture				Brazil
Direct and indirect interest, Joint Venture				25.00%	25.00%	25.00%
Geekie Desenvolvimento de Softwares S.A
Significant Accounting Policies
Principal activities				Educational technology
Country of Incorporation, Associate				Brazil
Direct and indirect interest, Associate				37.50%	8.05%	6.50%

Significant Accounting Polici_6

Significant Accounting Policies - Revenue from contracts with customers (Details)	12 Months Ended
	Dec. 31, 2019
Minimum
Significant Accounting Policies
Termination penalties as a percentage of revenue	20.00%
Maximum
Significant Accounting Policies
Termination penalties as a percentage of revenue	100.00%

Significant Accounting Polici_7

Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2019
Machinery and equipment
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	10.00%
Vehicles
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	20.00%
Furniture and fixture
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	10.00%
IT equipment
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	20.00%
Facilities
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	10.00%
Leasehold improvements | Minimum
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	20.00%
Leasehold improvements | Maximum
Significant Accounting Policies
Depreciation Rates over the estimated useful lives of the assets	33.00%

Significant Accounting Polici_8

Significant Accounting Policies - Right-of-use Assets (Details)	12 Months Ended
	Dec. 31, 2019
Buildings | Minimum
Significant Accounting Policies
Estimated useful life and lease term	1 year
Buildings | Maximum
Significant Accounting Policies
Estimated useful life and lease term	10 years
Equipment
Significant Accounting Policies
Estimated useful life and lease term	4 years

Significant Accounting Polici_9

Significant Accounting Policies - Summary of Adopting IFRS 16 Impact on the Statement of Financial Position (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
Assets
Right-of-use assets	R$ 21631	R$ 18225
Deferred tax assets	156,748	100,073	R$ 99460	R$ 7310	R$ 5860
Total assets	3,161,423		1,334,878
Liabilities
Lease liabilities	25,857	20,089
Total liabilities	R$ 1566613		R$ 264994
IFRS 16
Assets
Right-of-use assets		18,225
Deferred tax assets		613
Total assets		18,838
Liabilities
Lease liabilities		20,089
Total liabilities		20,089
Equity
Retained earnings		R$ 1251

Significant Accounting Polic_10

Significant Accounting Policies - Operating lease commitments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Lease liabilities reconciled to the operating lease commitments
Operating lease commitments as at December 31, 2018			R$ 27397
Weighted average incremental borrowing rate as at January 1, 2019		11.04%
Discounted operating lease commitments at January 1, 2019		R$ 20642
Less: Commitments related to sale of Escola de Aplicao So Jos dos Campos Ltda.		(553)
Total lease liabilities	R$ 25857	R$ 20089

Significant accounting judgem_2

Significant accounting judgements, estimates and assumptions - Additional Information (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Significant accounting judgements, estimates and assumptions
Unrecognized unused tax loss	R$ 4066	R$ 10427

Business Combinations and Acq_3

Business Combinations and Acquisition of Non-controlling Interests - Summary of Fair Value of Identifiable Assets and liabilities as of Date of Each Acquisition (Details) - BRL (R$) R$ in Thousands

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Nov. 01, 2019

Oct. 29, 2019

Sep. 29, 2019

May 31, 2019

May 07, 2019

Apr. 29, 2019

Jan. 01, 2019

Jan. 01, 2018

Sep. 28, 2017

Jan. 23, 2017

Dec. 21, 2015

Assets

Deferred income tax

R$ 156748

R$ 99460

R$ 5860

R$ 100073

R$ 7310

Right-of-use assets

21,631

18,225

Total assets

3,161,423

1,334,878

Liabilities

Leases

(25,857)

R$ 20089

Loans and financing

(98,561)

Total liabilities

(1,566,613)

(264,994)

Forward contract of controlling interest at acquisition

29,728

Retained payments

874,440

Analysis of cash flows on acquisition:

Transaction costs of the acquisition (included in cash flows from operating activities)

473

R$ 659

(6,657)

EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento")

Assets

Cash and cash and equivalents

219

Trade receivables

126

Recoverable taxes

12

Other assets

14

Property and equipment

80

Intangible assets

5,866

Total assets

6,317

Liabilities

Trade payables

(48)

Labor and social obligations

(240)

Taxes and contributions payable

(109)

Loans and financing

(548)

Other liabilities

(156)

Total liabilities

(1,101)

Total identifiable net assets at fair value

5,216

Goodwill arising on acquisition

13,069

R$ 13069

Purchase consideration transferred

18,285

18,285

Cash paid

16,355

R$ 260

R$ 16095

Retained payments

1,930

Analysis of cash flows on acquisition:

Transaction costs of the acquisition (included in cash flows from operating activities)

(649)

Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities)

(16,136)

Nave a Vela Ltda. ("Nave")

Assets

Cash and cash and equivalents

1,565

Trade receivables

896

Inventories

897

Recoverable taxes

7

Other assets

284

Property and equipment

292

Intangible assets

19,009

Total assets

22,950

Liabilities

Trade payables

(271)

Labor and social obligations

(1,444)

Taxes and contributions payable

(50)

Income taxes payable

(2)

Other liabilities

(546)

Total liabilities

(2,313)

Total identifiable net assets at fair value

20,637

Goodwill arising on acquisition

37,557

R$ 37557

Purchase consideration transferred

58,194

58,194

R$ 4200

Cash paid

21,098

R$ 21098

Forward contract of controlling interest at acquisition

29,728

Fair value of previously held interest in a step acquisition

7,368

Analysis of cash flows on acquisition:

Transaction costs of the acquisition (included in cash flows from operating activities)

(467)

Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities)

(19,533)

Sistema Positivo de Ensino ("Positivo")

Assets

Cash and cash and equivalents

37,635

Trade receivables

72,780

Inventories

13,664

Recoverable taxes

99

Deferred income tax

7,518

Other assets

1,526

Property and equipment

4,760

Right-of-use assets

5,241

Intangible assets

773,134

Total assets

916,357

Liabilities

Trade payables

(12,463)

Labor and social obligations

(29,607)

Taxes and contributions payable

(2,937)

Income taxes payable

(22,643)

Leases

(5,374)

Total liabilities

(73,024)

Total identifiable net assets at fair value

843,333

Goodwill arising on acquisition

830,028

R$ 830028

Purchase consideration transferred

1,673,361

R$ 1745160

R$ 800851

Cash paid

800,851

Retained payments

872,510

Analysis of cash flows on acquisition:

Transaction costs of the acquisition (included in cash flows from operating activities)

(27,389)

Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities)

R$ 763216

NS Educacao Ltda. ("NS Educacao")

Assets

Cash and cash and equivalents

1

Intangible assets

9,707

Total assets

9,708

Liabilities

Total identifiable net assets at fair value

9,708

Goodwill arising on acquisition

28,826

R$ 28826

Purchase consideration transferred

38,534

38,534

Cash paid

29,037

R$ 29037

Deferred payments

9,497

Analysis of cash flows on acquisition:

Transaction costs of the acquisition (included in cash flows from operating activities)

(498)

Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities)

(29,036)

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")

Assets

Cash and cash and equivalents

689

Trade receivables

10,576

Inventories

1,837

Recoverable taxes

173

Other assets

470

Property and equipment

323

Intangible assets

29,736

Total assets

43,804

Liabilities

Trade payables

(2,327)

Labor and social obligations

(696)

Taxes and contributions payable

(119)

Income taxes payable

(410)

Other liabilities

(340)

Total liabilities

(3,892)

Total identifiable net assets at fair value

39,912

R$ 39912

Goodwill arising on acquisition

27,598

27,598

Purchase consideration transferred

67,510

R$ 67510

R$ 12300

Capital contribution

5,300

Forward contract of controlling interest at acquisition

30,144

Fair value of previously held interest in a step acquisition

32,066

Analysis of cash flows on acquisition:

Transaction costs of the acquisition (included in cash flows from operating activities)

(85)

Cash paid and subscribed capital net of cash acquired with the subsidiary (included in cash flows from investing activities)

R$ 689

Business Combinations and Acq_4

Business Combinations and Acquisition of Non-controlling Interests - Additional Information (Details) $ / shares in Units, R$ in Thousands, $ in Millions

Oct. 29, 2019BRL (R$)

Apr. 29, 2019BRL (R$)installment

Sep. 28, 2017BRL (R$)

Jan. 31, 2017

Jan. 23, 2017BRL (R$)

Dec. 21, 2015BRL (R$)

May 31, 2019BRL (R$)

Jan. 31, 2017BRL (R$)

Dec. 31, 2019BRL (R$)

Dec. 31, 2017USD ($)

Dec. 31, 2017BRL (R$)

Dec. 31, 2016BRL (R$)

Dec. 31, 2019$ / shares

Dec. 31, 2019BRL (R$)

Nov. 01, 2019BRL (R$)

Sep. 29, 2019BRL (R$)

May 07, 2019BRL (R$)

Dec. 31, 2018BRL (R$)

Business combinations and acquisition of non-controlling interests

Repayment term (in years)

5 years

Goodwill

R$ 916767

R$ 89634

Nominal value per share | $ / shares

$ 0.00005

Cash consideration paid to selling shareholders on acquisition date

R$ 4000

EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento")

Business combinations and acquisition of non-controlling interests

Amount of ownership acquired

R$ 18285

18,285

Net revenue

R$ 2395

Profit (loss) before income taxes

(2,918)

Net revenue, if combination had taken place at beginning of year

574,391

Profit before income taxes, if combination had taken place at beginning of year

43,095

Cash consideration

16,095

16,355

R$ 260

Deferred payment

R$ 1930

Escrow account deposit period

2 years

Goodwill recorded on acquisition

R$ 13069

13,069

Number of Equal Annual Installment | installment

2

Contingent liabilities, annual payment amount

R$ 965

Remaining voting interest acquired

100.00%

EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento") | General and administrative expenses

Business combinations and acquisition of non-controlling interests

Transaction costs

649

Nave a Vela Ltda. ("Nave")

Business combinations and acquisition of non-controlling interests

Percentage of ownership, Subsidiary

37.80%

13.20%

Amount of ownership acquired

R$ 58194

R$ 4200

58,194

Remaining interest held by non-controlling shareholders

100.00%

Transaction costs

467

Net revenue

7,147

Profit (loss) before income taxes

3,379

Net revenue, if combination had taken place at beginning of year

580,276

Profit before income taxes, if combination had taken place at beginning of year

44,603

Cash consideration

21,098

21,098

Deferred payment

R$ 29728

Escrow account deposit period

2 years

Consideration Regarding Previously Held Interest In Step Acquisition

R$ 7368

Carrying Amount Of The Investment Previously Held Interest In Step Acquisition

3,660

Gain In Step Acquisition

3,708

Goodwill recorded on acquisition

R$ 37557

37,557

Remaining voting interest acquired

51.00%

Sistema Positivo de Ensino ("Positivo")

Business combinations and acquisition of non-controlling interests

Amount of ownership acquired

1,673,361

R$ 1745160

R$ 800851

Reduction Of Amount Of Transaction By Restricted Values Percentage

50.00%

Reduction Of Amount Of Transaction By Restricted Values

R$ 71729

Transaction costs

27,389

Net revenue

80,100

Profit (loss) before income taxes

25,641

Net revenue, if combination had taken place at beginning of year

884,504

Profit before income taxes, if combination had taken place at beginning of year

R$ 78128

Cash consideration

800,851

Goodwill recorded on acquisition

R$ 830028

R$ 830028

NS Educacao Ltda. ("NS Educacao")

Business combinations and acquisition of non-controlling interests

Percentage of ownership, Subsidiary

100.00%

Amount of ownership acquired

R$ 38534

R$ 38534

Transaction costs

498

Net revenue | $

$ 0

Profit (loss) before income taxes

(1,050)

Net revenue, if combination had taken place at beginning of year

258,848

Profit before income taxes, if combination had taken place at beginning of year

70,357

Cash consideration

29,037

29,037

Deferred payment

R$ 7302

Escrow account deposit period

5 years

Acquisition price adjustment

R$ 2195

Acquisition price adjustment description

The equivalent of 5% of the original purchase price was determined as an "acquisition price adjustment", which was calculated based on the difference between the revenue from 2017 less the projected revenue for that year multiplied by 2.50.

Goodwill recorded on acquisition

R$ 28826

28,826

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")

Business combinations and acquisition of non-controlling interests

Percentage of ownership, Subsidiary

51.48%

40.00%

Amount of ownership acquired

R$ 67510

R$ 12300

67,510

Remaining interest held by non-controlling shareholders

60.00%

Controlling interest remaining to be acquired after exercise of option

60.00%

Goodwill

R$ 4200

Additional ownership interest acquired

11.48%

Payments made for additional ownership

R$ 5300

Estimated interest rate

21.00%

Gain recognized in statement of income in other operating income (expense)

1,184

Net revenue

25,382

Profit (loss) before income taxes

7,465

Net revenue, if combination had taken place at beginning of year

244,426

Profit before income taxes, if combination had taken place at beginning of year

67,024

Goodwill recorded on acquisition

R$ 27598

27,598

Capital contribution

5,300

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | January 1, 2021 and April 30, 2021

Business combinations and acquisition of non-controlling interests

Remaining interest held by non-controlling shareholders

25.00%

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | January 1, 2021 and April 30, 2020

Business combinations and acquisition of non-controlling interests

Remaining interest held by non-controlling shareholders

23.52%

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | 2019 school year

Business combinations and acquisition of non-controlling interests

Remaining interest held by non-controlling shareholders

25.00%

Amount that should have been contributed by selling shareholder at time of acquiree's capital increase

R$ 3180

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | 2020 school year

Business combinations and acquisition of non-controlling interests

Remaining interest held by non-controlling shareholders

23.52%

International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | General and administrative expenses

Business combinations and acquisition of non-controlling interests

Transaction costs

R$ 85

Business Combinations and Acq_5

Business Combinations and Acquisition of Non-controlling Interests - Summary of Consideration Transferred (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Oct. 29, 2019	May 31, 2019	Dec. 31, 2017	Jan. 23, 2017	Dec. 21, 2015
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")
Business combinations and acquisition of non-controlling interests
Capitalization of advances for future capital increases					R$ 5300
Fair value of previously held investment					32,066
Fair value of forward contract					30,144
Consideration transferred				R$ 67510	R$ 67510	R$ 12300
Nave a Vela Ltda. ("Nave")
Business combinations and acquisition of non-controlling interests
Cash paid	R$ 21098	R$ 21098
Fair value of previously held investment		7,368
Fair value of forward contract		29,728
Consideration transferred	R$ 58194	R$ 58194	R$ 4200

Business Combinations and Acq_6

Business Combinations and Acquisition of Non-controlling Interests - Summary of Calculation of Goodwill (Details) - International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") - BRL (R$) R$ in Thousands	Dec. 31, 2017	Jan. 23, 2017
Business combinations and acquisition of non-controlling interests
Cash consideration and fair value of forward contract		R$ 35444
Fair value of previously held investment		32,066
Fair value of identified assets acquired and liabilities assumed	R$ 39912	(39,912)
Goodwill	R$ 27598	R$ 27598

Business Combinations and Acq_7

Business Combinations and Acquisition of Non-controlling Interests - Summary of Valuation Techniques Used for Measuring Fair Value of Separately Identified Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2019
EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento") | Customer Relationship
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets.
EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento") | Software
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Replacement costThe method considers the amount that an entity would have to pay to replace at the present time, according to its current worth.
EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento") | Trademarks
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned.
EEM Licenciamento de Programas Educacionais S.A. ("Escola em Movimento") | Non-compete agreement
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	With-and-without methodThe With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence.
Nave a Vela Ltda. ("Nave") | Customer Relationship
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets.
Nave a Vela Ltda. ("Nave") | Educational system
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational system being owned.
Nave a Vela Ltda. ("Nave") | Trademarks
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned.
Nave a Vela Ltda. ("Nave") | Non-compete agreement
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	With-and-without methodThe With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence.
Sistema Positivo de Ensino ("Positivo") | Customer Relationship
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets.
Sistema Positivo de Ensino ("Positivo") | Educational system
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational system being owned.
Sistema Positivo de Ensino ("Positivo") | Educational platform
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the educational platform being owned.
Sistema Positivo de Ensino ("Positivo") | Trademarks
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned.
Sistema Positivo de Ensino ("Positivo") | Non-compete agreement
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	With-and-without methodThe With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence.
NS Educacao Ltda. ("NS Educacao") | Customer List
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets.
NS Educacao Ltda. ("NS Educacao") | Educational system
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by educational system, by excluding any cash flows related to contributory assets.
NS Educacao Ltda. ("NS Educacao") | Trademarks
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned.
NS Educacao Ltda. ("NS Educacao") | Non-compete agreement
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	With-and-without methodThe With-and-Without method consists of estimating the fair value of an asset by the difference between the value of this asset in two scenarios: a scenario considering the existence of the asset in question and another, considering its non-existence.
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | Customer List
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by customer relationship, by excluding any cash flows related to contributory assets.
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | Educational system
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Multi-period excess earning methodThe method considers the present value of net cash flows expected to be generated by educational system, by excluding any cash flows related to contributory assets.
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School") | Trademarks
Business Combinations and Acquisition of Non-controlling Interests
Valuation technique	Relief-from-royalty methodThe relief-from-royalty method considers the discount estimated royalty payments that are expected to be avoided as a result of the trademarks being owned.

Cash and Cash Equivalents - Sum

Cash and Cash Equivalents - Summary of Cash and Cash Equivalents (Details) R$ in Thousands, $ in Thousands	Dec. 31, 2019USD ($)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
Cash and cash equivalents.
Cash and bank deposits		R$ 2838	R$ 366
Cash equivalents and bank deposits in foreign currency		23,346	3,615
Cash equivalents		22,716	8,320
Cash and cash equivalents	$ 6,197	R$ 48900	R$ 12301	R$ 834	R$ 4358

Cash and Cash Equivalents - S_2

Cash and Cash Equivalents - Summary of Cash and Cash Equivalents - Additional information (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash and cash equivalents.
Average percentage on Bank Certificates of Deposit	30.00%	61.70%

Financial Investments - Summary

Financial Investments - Summary of Financial Investments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial investments.
Financial investments	R$ 577398	R$ 810812
Financial investments in foreign currency	1,629
Other	467	347
Total financial investments	579,494	811,159
Current	574,804	806,789
Non-current	R$ 4690	R$ 4370

Financial Investments - Summa_2

Financial Investments - Summary of Financial Investments - Additional information (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Financial investments.
Average interest on financial investment in highly rated financial institutions	99.86%	100.90%
Average CDI rate per month on financial investment	0.48%

Trade Receivables - Summary of

Trade Receivables - Summary of Trade Receivables (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Trade receivables.
From sales of educational content	R$ 354968	R$ 146114
From related parties (Note 10)	4,511	3,916
Gross trade receivables	359,479	150,030
(-) Allowance for doubtful accounts	(30,051)	(13,419)	R$ 10290	R$ 5386
Trade Receivables	R$ 329428	R$ 136611

Trade Receivables - Summary o_2

Trade Receivables - Summary of Aging of Trade Receivables (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Trade receivables
Gross trade receivables	R$ 359479	R$ 150030
Neither past due nor impaired
Trade receivables
Gross trade receivables	299,159	127,387
Past due
Trade receivables
Gross trade receivables	60,320	22,643
1 to 60 days
Trade receivables
Gross trade receivables	18,931	8,931
61 to 90 days
Trade receivables
Gross trade receivables	6,865	3,868
91 to 120 days
Trade receivables
Gross trade receivables	6,414	1,978
121 to 180 days
Trade receivables
Gross trade receivables	9,904	3,173
More than 180 days
Trade receivables
Gross trade receivables	R$ 18206	R$ 4693

Trade Receivables - Summary o_3

Trade Receivables - Summary of Allowance for Doubtful Accounts (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Trade receivables.
Allowance for doubtful accounts, Beginning balance	R$ 13419	R$ 10290	R$ 5386
Change in accounting policy - IFRS 9			(5,757)
Additions	(17,392)	(9,588)	(5,227)
Receivables written off during the year as uncollectible	760	6,459	6,080
Allowance for doubtful accounts, Ending balance	R$ 30051	R$ 13419	R$ 10290

Inventories - Summary of Invent

Inventories - Summary of Inventories (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Inventories
Educational content	R$ 24535	R$ 8335
Educational content in progress	12,837	6,205
Consumables and supplies	835	286
Inventories held by third parties	1,899	305
Inventories	R$ 40106	R$ 15131

Inventories - Summary of Moveme

Inventories - Summary of Movement in Inventory Reserve (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Inventories
Beginning balance	R$ 4403	R$ 2047	R$ 1073
Inventory reserve	(8,476)	(7,252)	(4,481)
Write-off of inventories against reserve	6,362	4,896	3,507
Ending balance	R$ 6517	R$ 4403	R$ 2047

Recoverable taxes - Summary of

Recoverable taxes - Summary of Tax Recoverable (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Recoverable taxes
Recoverable taxes	R$ 22225	R$ 12260
Current	15,612	11,227
Non current	6,613	1,033
Withholding Income Tax (IRRF) on financial investments
Recoverable taxes
Recoverable taxes	637	5,291
IRPJ and CSLL
Recoverable taxes
Recoverable taxes	17,456	5,520
PIS and COFINS
Recoverable taxes
Recoverable taxes	2,501	1,223
Other tax
Recoverable taxes
Recoverable taxes	R$ 1631	R$ 226

Related Parties - Summary of Ba

Related Parties - Summary of Balances and Transactions With Related Parties (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	Jan. 17, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Related parties
Receivables from related parties		R$ 16111	R$ 1226
Current		1,298
Non-current		14,813	1,226
Advances from customers		(1)
Finance income - Related party transaction		885
Trade receivables
Related parties
Receivables from related parties		4,511	3,916
Other assets
Related parties
Receivables from related parties		4,109
Loans to related parties
Related parties
Receivables from related parties		16,111	1,226
Livraria ASC Ltda. and Educadora ASC Ltda.
Related parties
Net revenue - Related party transaction		8,805	8,234	R$ 8895
Livraria ASC Ltda. and Educadora ASC Ltda. | Trade receivables
Related parties
Receivables from related parties		4,511	3,916
Livraria ASC Ltda. and Educadora ASC Ltda. | Advances from customers
Related parties
Advances from customers		(1)
General Atlantic Arco (Bermuda), L.P. | Other assets
Related parties
Receivables from related parties		4,109
ASC Empreendimentos Ltda. and OSC Empreendimentos Ltda.
Related parties
Expenses - Related party transaction		(8)	(13)	R$ 21
WPensar S.A.
Related parties
Finance income - Related party transaction		72
Number of debentures purchased	100,000
WPensar S.A. | Loans to related parties
Related parties
Receivables from related parties		1,298	R$ 1226
Geekie Desenvolvimento de Softwares S.A.
Related parties
Finance income - Related party transaction		813
Par value per debenture	R$ 100.00
Payments from issuance of Debenture	R$ 10000
Loans to related party excluding finance income	R$ 582	4,000
Total transaction amount intended to support related parties working capital needs		R$ 14000
Geekie Desenvolvimento de Softwares S.A. | CDI
Related parties
Percentage of basis used to calculate interest rate	110.00%	110.00%
Geekie Desenvolvimento de Softwares S.A. | Loans to related parties
Related parties
Finance income - Related party transaction		R$ 231
Loans - Geekie | Loans to related parties
Related parties
Receivables from related parties		4,231
Debentures - Geekie | Loans to related parties
Related parties
Receivables from related parties		R$ 10582

Related Parties - Summary of Ke

Related Parties - Summary of Key Management Personnel Compensation (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Related parties
Short-term employee benefits	R$ 13732	R$ 9436	R$ 5321
Stock options		59,747	1,359
Restricted stock units	66,429
Key management personnel compensation	R$ 80161	R$ 69183	R$ 6680

Investments and Interests in _3

Investments and Interests in Other Entities - Additional Information (Details) - BRL (R$) R$ in Thousands

Nov. 15, 2019

Oct. 25, 2019

Oct. 14, 2019

Sep. 20, 2019

Jul. 02, 2018

Dec. 31, 2019

Jan. 31, 2017

Dec. 31, 2016

Apr. 30, 2015

Dec. 31, 2019

Dec. 31, 2018

Jun. 30, 2018

Investments and Interests in Other Entities

Cash consideration paid to selling shareholders on acquisition date

R$ 4000

Geekie Desenvolvimento de Softwares S.A.

Investments and Interests in Other Entities

Ownership interest percentage in associates

8.05%

6.54%

Percentage on acquisition of additional interest in equity

1.51%

Payment to acquire additional interest

R$ 2000

Circumstances used to determination of exercise price

the Company's EBITDA for 2021 multiplied by Geekie's EBITDA, including any cash or debt; or10 times Geekie´s EBITDA for 2021, less net debt.

Put options

Investments and Interests in Other Entities

Remaining ownership interest percentage

75.00%

WPensar S.A.

Investments and Interests in Other Entities

Ownership interest percentage in joint venture

25.00%

Cash consideration

R$ 5000

R$ 5000

Capital contribution

4,777

4,777

Initial recognition

R$ 223

R$ 223

Cash and cash equivalent threshold amount of selling shareholders

R$ 5000

WPensar S.A. | Call Options

Investments and Interests in Other Entities

Remaining ownership interest percentage

75.00%

Derivative exercise period

July 10, 2020 through July 10, 2021

WPensar S.A. | Put options

Investments and Interests in Other Entities

Derivative exercise period

July 10, 2021 through July 10, 2022

Geekie Desenvolvimento de Softwares S.A.

Investments and Interests in Other Entities

Cash consideration

8,000

Capital contribution

R$ 4000

Ownership interest percentage in associates

6.54%

Additional capital to subscribe if cash and cash equivalent are lower than threshold of selling shareholders

R$ 2000

Percentage on acquisition of additional interest in equity

1.17%

18.44%

1.92%

0.96%

7.00%

Payment to acquire additional interest

R$ 2000

R$ 2500

R$ 1218

R$ 4282

Remaining ownership interest percentage

30.53%

29.36%

10.92%

9.01%

37.53%

Geekie Desenvolvimento de Softwares S.A. | Call Options

Investments and Interests in Other Entities

Derivative exercise period

May 1, 2022, through May 31, 2022

Maximum percentage of settlement up on exercise of the option

50.00%

Remaining ownership interest percentage

62.47%

Geekie Desenvolvimento de Softwares S.A. | Put options

Investments and Interests in Other Entities

Remaining ownership interest percentage

62.47%

Investments and Interests in _4

Investments and Interests in Other Entities - Summary of Investment and Interests in Other Entities (Details) - BRL (R$) R$ in Thousands	Oct. 25, 2019	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments and Interests in Other Entities
Investments and interests in other entities, beginning balance			R$ 11862	R$ 12654
Capital contributions			14,200
Acquisition from a minority shareholder			27,653
Gain of changes in ownership			319
Share of loss of equity-accounted investees			(1,800)	(792)
Consolidation on the acquisition of control			(3,660)
Investments and interests in other entities, ending balance		R$ 48574	48,574	11,862	R$ 12654
WPensar S.A.
Investments and Interests in Other Entities
Investments and interests in other entities, beginning balance			3,237
Share of loss of equity-accounted investees			(188)
Investments and interests in other entities, ending balance		3,049	R$ 3049	3,237
Percentage of ownership, Subsidiary			25.00%
Geekie Desenvolvimento de Softwares S.A.
Investments and Interests in Other Entities
Acquisition from a minority shareholder	R$ 21892	5,761
Geekie Desenvolvimento de Softwares S.A.
Investments and Interests in Other Entities
Investments and interests in other entities, beginning balance			R$ 8625
Capital contributions			10,000
Acquisition from a minority shareholder			27,653
Gain of changes in ownership			319
Share of loss of equity-accounted investees			(1,072)
Investments and interests in other entities, ending balance		R$ 45525	R$ 45525	R$ 8625
Percentage of ownership, Subsidiary			37.50%
Nave a Vela Ltda. ("Nave")
Investments and Interests in Other Entities
Capital contributions			R$ 4200
Share of loss of equity-accounted investees			(540)
Consolidation on the acquisition of control			R$ 3660
Percentage of ownership, Subsidiary			51.00%
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")
Investments and Interests in Other Entities
Percentage of ownership, Subsidiary			51.50%	51.50%	51.50%

Investments and Interests in _5

Investments and Interests in Other Entities - Summary of Financial Information of Associates and Joint Venture (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Investments and interests in other entities
Current assets	R$ 1028572	R$ 988150
Non-current assets	2,132,851	346,728
Current liabilities	412,176	57,888
Non-current liabilities	1,154,437	207,106
Equity	1,594,810	1,069,884	R$ 305735	R$ 241168
Net revenue	572,837	380,981	244,382
Profit (loss) for the year	(9,431)	(82,916)	43,640
WPensar S.A.
Investments and interests in other entities
Current assets	1,619	1,625	1,615
Non-current assets	1,687	1,414	1,394
Current liabilities	268	286	284
Non-current liabilities	1,240	1,170	1,091
Equity	1,798	1,583	1,634
Net revenue	4,200	3,965	3,687
Costs and expenses (*)	(3,985)	(4,015)	(3,598)
Profit (loss) for the year	215	(50)	89
Geekie Desenvolvimento de Softwares S.A.
Investments and interests in other entities
Current assets	8,444	5,215	8,937
Non-current assets	17,983	12,174	11,503
Current liabilities	5,042	7,681	5,276
Non-current liabilities	10,964
Equity	10,421	9,708	15,164
Net revenue	14,266	11,084	14,329
Costs and expenses (*)	(25,848)	(18,299)	(15,865)
Profit (loss) for the year	R$ 11582	R$ 7215	R$ 1536

Property and Equipment - Summar

Property and Equipment - Summary of Property and Equipment (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property and equipment
Beginning balance	R$ 13347
Ending balance	21,328	R$ 13347
Gross carrying amount
Property and equipment
Beginning balance	19,625	12,926
Additions	10,991	6,854
Disposals	(5,593)	(155)
Business combinations	5,132
Sale of Escola de Aplicao So Jos dos Campos Ltda.	(1,012)
Write-offs	(792)
Ending balance	28,351	19,625
Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(6,278)	(3,847)
Depreciation charge for the year	(4,355)	(2,448)
Disposals		17
Sale of Escola de Aplicao So Jos dos Campos Ltda.	211
Depreciation of disposals	3,399
Ending balance	(7,023)	(6,278)
Machinery and equipment
Property and equipment
Beginning balance	642
Ending balance	1,036	642
Machinery and equipment | Gross carrying amount
Property and equipment
Beginning balance	896	843
Additions	215	87
Disposals	(17)	(34)
Business combinations	213
Sale of Escola de Aplicao So Jos dos Campos Ltda.	(50)
Ending balance	1,257	896
Machinery and equipment | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(254)	(170)
Depreciation charge for the year	(91)	(84)
Sale of Escola de Aplicao So Jos dos Campos Ltda.	10
Depreciation of disposals	114
Ending balance	(221)	(254)
Vehicles
Property and equipment
Beginning balance	47
Ending balance	21	47
Vehicles | Gross carrying amount
Property and equipment
Beginning balance	191	191
Disposals	(70)
Ending balance	121	191
Vehicles | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(144)	(120)
Depreciation charge for the year	(24)	(24)
Depreciation of disposals	68
Ending balance	(100)	(144)
Furniture and fixture
Property and equipment
Beginning balance	1,769
Ending balance	1,974	1,769
Furniture and fixture | Gross carrying amount
Property and equipment
Beginning balance	2,296	1,758
Additions	636	589
Disposals	(895)	(51)
Business combinations	517
Sale of Escola de Aplicao So Jos dos Campos Ltda.	(201)
Ending balance	2,353	2,296
Furniture and fixture | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(527)	(324)
Depreciation charge for the year	(254)	(203)
Sale of Escola de Aplicao So Jos dos Campos Ltda.	34
Depreciation of disposals	368
Ending balance	(379)	(527)
IT equipment
Property and equipment
Beginning balance	3,170
Ending balance	5,877	3,170
IT equipment | Gross carrying amount
Property and equipment
Beginning balance	5,080	3,047
Additions	2,529	2,096
Disposals	(3,061)	(63)
Business combinations	2,775
Sale of Escola de Aplicao So Jos dos Campos Ltda.	(51)
Ending balance	7,272	5,080
IT equipment | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(1,910)	(1,187)
Depreciation charge for the year	(1,211)	(740)
Disposals		17
Sale of Escola de Aplicao So Jos dos Campos Ltda.	17
Depreciation of disposals	1,709
Ending balance	(1,395)	(1,910)
Facilities
Property and equipment
Beginning balance	225
Ending balance	54	225
Facilities | Gross carrying amount
Property and equipment
Beginning balance	325	313
Additions	45	12
Disposals	(290)
Ending balance	80	325
Facilities | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(100)	(65)
Depreciation charge for the year	(34)	(35)
Depreciation of disposals	108
Ending balance	(26)	(100)
Leasehold improvements
Property and equipment
Beginning balance	3,364
Ending balance	7,809	3,364
Leasehold improvements | Gross carrying amount
Property and equipment
Beginning balance	4,638	4,387
Additions	4,663	258
Disposals	(184)	(7)
Business combinations	1,627
Sale of Escola de Aplicao So Jos dos Campos Ltda.	(710)
Ending balance	10,034	4,638
Leasehold improvements | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(1,274)	(790)
Depreciation charge for the year	(1,161)	(484)
Sale of Escola de Aplicao So Jos dos Campos Ltda.	150
Depreciation of disposals	60
Ending balance	(2,225)	(1,274)
Others
Property and equipment
Beginning balance	4,130
Ending balance	4,557	4,130
Others | Gross carrying amount
Property and equipment
Beginning balance	6,199	2,387
Additions	2,903	3,812
Disposals	(1,076)
Write-offs	(792)
Ending balance	7,234	6,199
Others | Accumulated depreciation and amortisation
Property and equipment
Beginning balance	(2,069)	(1,191)
Depreciation charge for the year	(1,580)	(878)
Depreciation of disposals	972
Ending balance	R$ 2677	R$ 2069

Leases (Details)

Leases (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019
Leases
Right-of-use assets	R$ 21631	R$ 18225
Lease liabilities *
Current lease liabilities	6,845
Non-current lease liabilities	19,012
Total lease liabilities	25,857	R$ 20089
Properties
Leases
Right-of-use assets	21,518
Machinery and equipment
Leases
Right-of-use assets	R$ 113

Leases - Carrying amounts and m

Leases - Carrying amounts and movements of leases (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)
Right-of-use assets - Properties
Additions	R$ 4502
Lease modification	(338)
Depreciation expense	(5,999)
Business combination	5,241
Balance at the end	21,631
Lease liabilities *
Additions	(4,502)
Lease modification	338
Business combination	(5,374)
Interest expense	(1,489)
Payments of lease liabilities	4,407
Interest paid	852
Balance at the end	R$ 25857
Average annual depreciation rate (as a percent)	23.70%
Rent expense from short-term leases and low-value assets	R$ 2613

Intangible Assets and Goodwil_2

Intangible Assets and Goodwill - Changes (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Intangible assets and goodwill
Beginning Balance	R$ 187740
Corporate reorganization	(36,624)	R$ 74438
Ending balance	1,811,903	187,740
Gross carrying amount
Intangible assets and goodwill
Beginning Balance	224,496	195,093
Corporate reorganization	(53,521)
Acquisitions	43,102		R$ 29403
Disposals	(1,841)
Acquisitions through business combination	1,678,663
Ending balance	1,890,899	224,496	195,093
Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(36,756)	(19,610)
Amortization	(42,776)	(17,146)
Amortization of disposals	536
Ending balance	(78,996)	(36,756)	(19,610)
Goodwill
Intangible assets and goodwill
Beginning Balance	89,634
Ending balance	916,767	89,634
Goodwill | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	89,634	89,634
Corporate reorganization	(53,521)
Acquisitions through business combination	880,654
Ending balance	916,767	89,634	89,634
Rights on contracts
Intangible assets and goodwill
Beginning Balance	11,314
Ending balance	9,972	11,314
Rights on contracts | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	15,263	15,263
Ending balance	15,263	15,263	15,263
Rights on contracts | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(3,949)	(2,767)
Amortization	(1,342)	(1,182)
Ending balance	(5,291)	(3,949)	(2,767)
Customer relationships
Intangible assets and goodwill
Beginning Balance	15,485
Ending balance	192,961	15,485
Customer relationships | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	23,045	23,045
Acquisitions through business combination	183,926
Ending balance	206,971	23,045	23,045
Customer relationships | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(7,560)	(4,924)
Amortization	(6,450)	(2,636)
Ending balance	(14,010)	(7,560)	(4,924)
Educational system
Intangible assets and goodwill
Beginning Balance	23,940
Ending balance	228,989	23,940
Educational system | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	36,656	36,656
Acquisitions through business combination	214,567
Ending balance	251,223	36,656	36,656
Educational system | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(12,716)	(6,127)
Amortization	(9,518)	(6,589)
Ending balance	(22,234)	(12,716)	(6,127)
Copy rights
Intangible assets and goodwill
Beginning Balance	8,753
Ending balance	9,387	8,753
Copy rights | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	12,692	4,948
Acquisitions	8,377		7,744
Ending balance	21,069	12,692	4,948
Copy rights | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(3,939)	(1,321)
Amortization	(7,743)	(2,618)
Ending balance	(11,682)	(3,939)	(1,321)
Software license
Intangible assets and goodwill
Beginning Balance	2,160
Ending balance	15,457	2,160
Software license | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	2,808	1,393
Acquisitions	4,441		1,415
Acquisitions through business combination	11,163
Ending balance	18,412	2,808	1,393
Software license | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(648)	(273)
Amortization	(2,307)	(375)
Ending balance	(2,955)	(648)	(273)
Trademarks
Intangible assets and goodwill
Beginning Balance	15,367
Ending balance	347,057	15,367
Trademarks | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	19,177	19,115
Acquisitions			62
Acquisitions through business combination	336,121
Ending balance	355,298	19,177	19,115
Trademarks | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(3,810)	(2,670)
Amortization	(4,431)	(1,140)
Ending balance	(8,241)	(3,810)	(2,670)
Educational platform
Intangible assets and goodwill
Beginning Balance	18,051
Ending balance	74,214	18,051
Educational platform | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	21,911	3,942
Acquisitions	23,634		17,969
Disposals	(1,841)
Acquisitions through business combination	24,728
Transfer	19,555
Ending balance	87,987	21,911	3,942
Educational platform | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(3,860)	(1,473)
Amortization	(10,449)	(2,387)
Amortization of disposals	536
Ending balance	(13,773)	(3,860)	(1,473)
Non-compete agreement
Intangible assets and goodwill
Beginning Balance	823
Ending balance	7,493	823
Non-compete agreement | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	1,097	1,097
Acquisitions	309
Acquisitions through business combination	6,897
Ending balance	8,303	1,097	1,097
Non-compete agreement | Accumulated depreciation and amortisation
Intangible assets and goodwill
Beginning Balance	(274)	(55)
Amortization	(536)	(219)
Ending balance	(810)	(274)	(55)
in progress
Intangible assets and goodwill
Beginning Balance	2,213
Ending balance	9,606	2,213
in progress | Gross carrying amount
Intangible assets and goodwill
Beginning Balance	2,213
Acquisitions	6,341		R$ 2213
Acquisitions through business combination	20,607
Transfer	(19,555)
Ending balance	R$ 9606	R$ 2213

Intangible Assets and Goodwil_3

Intangible Assets and Goodwill - Goodwill (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill
Goodwill, carrying amount	R$ 916767	R$ 89634
Fair value assumptions
Goodwill impairment	0	0	R$ 0
Core
Goodwill
Goodwill, carrying amount	755,539	62,036
Value -in-use	2,130,003	R$ 721271
Carrying amount	R$ 1846915
Fair value assumptions
Discount rate (as a percent)	12.70%	15.70%
Core | Gross margin | Decrease in basis points
Fair value assumptions
Increase (decrease) in basis points	(1.20%)
Gross margin (as a percent)	75.50%
Core | Discount rate | Increase in basis points
Fair value assumptions
Increase (decrease) in basis points	1.20%
Discount rate (as a percent)	13.80%
Core | Budget period
Fair value assumptions
Gross margin (as a percent)	76.70%	78.80%
Growth rate (as a percent)	11.10%	21.10%
Core | Beyond budget period
Fair value assumptions
Growth rate (as a percent)	4.30%	4.00%
Supplemental
Goodwill
Goodwill, carrying amount	R$ 161228	R$ 27598
Value -in-use	854,855	R$ 195023
Carrying amount	R$ 34889
Fair value assumptions
Discount rate (as a percent)	14.50%	17.60%
Supplemental | Gross margin | Decrease in basis points
Fair value assumptions
Increase (decrease) in basis points	(1.20%)
Gross margin (as a percent)	79.80%
Supplemental | Discount rate | Increase in basis points
Fair value assumptions
Increase (decrease) in basis points	1.20%
Discount rate (as a percent)	15.70%
Supplemental | Budget period
Fair value assumptions
Gross margin (as a percent)	81.00%	87.40%
Growth rate (as a percent)	18.30%	33.00%
Supplemental | Beyond budget period
Fair value assumptions
Growth rate (as a percent)	4.30%	4.00%

Intangible Assets and Goodwil_4

Intangible Assets and Goodwill - Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2019
Rights on contracts
Intangible assets and goodwill
Intangible assets, useful lives	10 years
Customer relationships | Minimum
Intangible assets and goodwill
Intangible assets, useful lives	5 years
Customer relationships | Maximum
Intangible assets and goodwill
Intangible assets, useful lives	16 years
Educational system | Minimum
Intangible assets and goodwill
Intangible assets, useful lives	3 years
Educational system | Maximum
Intangible assets and goodwill
Intangible assets, useful lives	10 years
Copy rights
Intangible assets and goodwill
Intangible assets, useful lives	3 years
Software license | Minimum
Intangible assets and goodwill
Intangible assets, useful lives	2 years
Software license | Maximum
Intangible assets and goodwill
Intangible assets, useful lives	5 years
Trademarks | Minimum
Intangible assets and goodwill
Intangible assets, useful lives	10 years
Trademarks | Maximum
Intangible assets and goodwill
Intangible assets, useful lives	20 years
Educational platform | Minimum
Intangible assets and goodwill
Intangible assets, useful lives	3 years
Educational platform | Maximum
Intangible assets and goodwill
Intangible assets, useful lives	10 years
Non-compete agreement | Minimum
Intangible assets and goodwill
Intangible assets, useful lives	2 years
Non-compete agreement | Maximum
Intangible assets and goodwill
Intangible assets, useful lives	5 years

Loans and financing (Details)

Loans and financing (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)
Loans and financing
Current borrowings	R$ 98561
Balance at beginning of the year	0
Additions	100,000
Business combination	548
Loan cost	(2,426)
Interest expense	1,002
Payment of loans and financing	(563)
Balance at end of year	R$ 98561
CDI
Loans and financing
Interest rate spread	100.00%
Interest rate	0.70%
Current borrowings	R$ 98561
Loan agreement, face amount	R$ 100000

Financial Instruments From Ac_3

Financial Instruments From Acquisition of Interests - Summary of Breakdown of Contingent Assets And Liabilities And Related Derivative Instruments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial Instruments From Acquisition of Interests
Derivative financial assets	R$ 35946	R$ 26630
Derivative financial assets, Current	3,794
Derivative financial assets, Non-current	32,152	26,630
Derivative financial liabilities	(33,940)	(25,097)
Derivative financial liabilities, Current		(51)
Derivative financial liabilities, Non-current	(33,940)	(25,046)
Escola de Aplicacao Sao Jose dos Campos Ltda.
Financial Instruments From Acquisition of Interests
Derivative financial liabilities		(54)
WPensar S.A.
Financial Instruments From Acquisition of Interests
Derivative financial assets	3,794	3,284
Derivative financial liabilities	(2,314)	(3,006)
Geekie Desenvolvimento de Softwares S.A.
Financial Instruments From Acquisition of Interests
Derivative financial assets	32,152	23,346
Derivative financial liabilities	R$ 31626	R$ 22037

Accounts payable to selling s_3

Accounts payable to selling shareholders (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accounts payable to selling shareholders
Accounts payable to selling shareholders	R$ 1216232	R$ 181381
Accounts payable to selling shareholders, Current	(117,959)	(830)
Accounts payable to selling shareholders, Non-current	(1,098,273)	(180,551)
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")
Accounts payable to selling shareholders
Accounts payable to selling shareholders	R$ 297722	R$ 174410
Accounts payable to shareholders estimated interest rate of derivatives	14.50%	17.60%
Recognized interest expense	R$ 33909
Increase in accounts payable to sale of share holders	89,403
NS Educacao Ltda. ("NS Educacao")
Accounts payable to selling shareholders
Accounts payable to selling shareholders	(6,461)	R$ 6971
Escola em Movimento
Accounts payable to selling shareholders
Accounts payable to selling shareholders	(1,992)
Nave Vela
Accounts payable to selling shareholders
Accounts payable to selling shareholders	(30,946)
Recognized interest expense	R$ 1218
Nave Vela | Remaining acquisition period
Accounts payable to selling shareholders
Accounts payable to shareholders estimated interest rate of derivatives	14.54%
Remaining acquisition interest	49.00%
Period to acquire remaining acquisition interest	2 years
Nave Vela | Tranche payable on February 15, 2021
Accounts payable to selling shareholders
Percentage of interest to be acquired	24.00%
Revenue interest	24.00%
Multiple of revenue net of debt	5.3
Nave Vela | Tranche payable on February 15, 2022
Accounts payable to selling shareholders
Percentage of interest to be acquired	25.00%
Revenue interest	25.00%
Multiple of revenue net of debt	3
Positivo
Accounts payable to selling shareholders
Accounts payable to selling shareholders	R$ 879111

Labor and Social Obligations -

Labor and Social Obligations - Summary (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
Labor and Social Obligations
Bonuses	R$ 28045	R$ 2897
Payroll and social charges	17,763	4,519
Payroll accruals	18,998	6,597
Other labor	6,506	1,875
Labor and social obligations	71,312	15,888
Current	68,511	15,888
Non-current	2,801
Bonus recorded	R$ 14519	R$ 4224	R$ 850
Arco plan
Labor and Social Obligations
Number of share options outstanding in share-based payment arrangement	0	1,091,039
Total compensation expense	R$ 0

Labor and Social Obligations _2

Labor and Social Obligations - Inputs Used for Arco Plan (Details) - Arco plan	12 Months Ended
	Dec. 31, 2019R$ / shares
Labor and Social Obligations
Dividend yield (%)	2.41%
Expected volatility (%)	186.61%
Risk-free interest rate (%)	8.01%
Expected life of share options (years)	6
Weighted average share price (R$)	R$ 12.67

Labor and Social Obligations _3

Labor and Social Obligations - Number and Movements of Share Options (Details) R$ / shares in Units, R$ in Thousands	Aug. 04, 2017	Dec. 31, 2019BRL (R$)R$ / shares	Dec. 31, 2018BRL (R$)R$ / shares
Arco plan
Number of share options
Outstanding, Beginning Balance		1,091,039
Exercised		(1,091,039)
Outstanding, Ending Balance		0	1,091,039
Average exercise price per share option
Outstanding, Beginning Balance		R$ 12.56
Exercise price		12.68
Outstanding, Ending Balance		R$ 0.00	R$ 12.56
Impact of share-based compensation reserve in Income Statement | R$		R$ 0
International school plan
Number of share options
Exercised		0	0
Average exercise price per share option
Exercise price		R$ 1.37
Impact of share-based compensation reserve in Income Statement | R$		R$ 549	R$ 550
Granted	294,735	0	0
Expired		0	0
Forfeited		0	0

Labor and Social Obligations _4

Labor and Social Obligations - Valuation Assumptions (Details) - International school plan	12 Months Ended
	Dec. 31, 2019R$ / shares
Labor and Social Obligations
Dividend yield (%)	0.00%
Expected volatility (%)	380.36%
Risk-free interest rate (%)	8.62%
Expected life of share options (years)	2.74
Weighted average share price (reais) on the grant date	R$ 10.65

Labor and Social Obligations _5

Labor and Social Obligations - Quantity Of Stock and Vesting Date (Details) - Restricted stock units	12 Months Ended
	Dec. 31, 2019shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of shares authorized	583,775
Quantity of stocks	583,775
28/09/2019
Disclosure of terms and conditions of share-based payment arrangement [line items]
Final vesting date	28/09/2019
Quantity of stocks	193,563
30/06/2020
Disclosure of terms and conditions of share-based payment arrangement [line items]
Final vesting date	30/06/2020
Quantity of stocks	3,086
28/09/2020
Disclosure of terms and conditions of share-based payment arrangement [line items]
Final vesting date	28/09/2020
Quantity of stocks	193,563
28/09/2021
Disclosure of terms and conditions of share-based payment arrangement [line items]
Final vesting date	28/09/2021
Quantity of stocks	193,563

Labor and Social Obligations _6

Labor and Social Obligations - Restricted Stock Units (Details) - Restricted stock units R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)shares
Labor and Social Obligations
Outstanding at the beginning	0
Granted	583,775
Exercised	(188,089)
Effectively forfeited	(36,913)
Estimated forfeited | shares	(21,588)
Outstanding at the end	337,185
Total compensation expense	R$ 66429
Total compensation expense, principal amount	32,494
Total compensation expense, taxes and contributions amount	R$ 33935

Labor and Social Obligations _7

Labor and Social Obligations - Equity Instruments Grant Date Fair Value (Details) - Restricted stock units R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)R$ / shares	Dec. 31, 2018
Disclosure of terms and conditions of share-based payment arrangement [line items]
Granted	583,775
Total shares outstanding	337,185	0
Average fair value at grant date	R$ 76986
Grant Date Period 1
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant date	30/04/2019
Granted	542,760
Total shares outstanding	310,516
Average fair value at grant date	R$ 68800
Average | R$ / shares	R$ 126.76
Grant Date Period 2
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant date	30/06/2019
Granted	1,543
Total shares outstanding	1,450
Average fair value at grant date	R$ 274
Average | R$ / shares	R$ 177.71
Grant Date Period 3
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant date	30/06/2019
Granted	1,543
Total shares outstanding	1,450
Average fair value at grant date	R$ 319
Average | R$ / shares	R$ 206.66
Grant Date Period 4
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant date	15/10/2019
Granted	37,929
Total shares outstanding	23,769
Average fair value at grant date	R$ 7593
Average | R$ / shares	R$ 200.18

Equity (Details)

Equity (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)Voteshares	Dec. 31, 2018BRL (R$)shares	Dec. 31, 2017BRL (R$)	Dec. 31, 2019$ / sharesshares	Oct. 29, 2019
Share capital
Number of shares issued		50,261,027		54,939,088
Share capital par value | $ / shares				$ 0.00005
Increase in capital | R$	R$ 13830	R$ 3091	R$ 86148
Movement in shares outstanding
Number of shares outstanding at beginning of period	50,261,027
Share-based compensation plan (Note 18)	1,091,039
Restricted Stock Units (Note 18)	188,089
Restricted Stock Unit withheld	(51,723)
Underwritten public offering of Class A common shares (Note 1)	3,450,656
Number of shares outstanding at end of period	54,939,088	50,261,027
Dividends
Mandatory minimum dividend percentage	25.00%
Dividend distribution | R$	R$ 0	R$ 0
Tax benefit on tax deductible goodwill - reversion
Tax benefit on tax deductible goodwill | R$	R$ 46314	R$ 46314
Class B common shares
Share capital
Number of shares issued		27,658,290		27,400,848
Movement in shares outstanding
Votes per share | Vote	10
Percentage of number shares issued and outstanding				10.00%
Class A common shares
Share capital
Number of shares issued		22,602,737		27,538,240
Conversion of stock					257,442
Movement in shares outstanding
Votes per share | Vote	1

Earnings (loss) per share (EP_3

Earnings (loss) per share (EPS) (Details) - BRL (R$) R$ / shares in Units, shares in Thousands, R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings (loss) per share (EPS)
Profit (loss) attributable to Equity holders of the parent	R$ 9431	R$ 82380	R$ 44255
Class A common shares
Earnings (loss) per share (EPS)
Profit (loss) attributable to Equity holders of the parent	R$ 4379	R$ 37047	R$ 19902
Weighted average number of common shares outstanding (thousand)	23,938	22,603	22,603
Share-based compensation plan (thousands)	R$ 337	R$ 153	R$ 931
Basic earnings (loss) per share - R$	R$ 0.18	R$ 1.64	R$ 0.88
Diluted earnings (loss) per share - R$	R$ 0.18	R$ 1.64	R$ 0.85
Class B common shares
Earnings (loss) per share (EPS)
Profit (loss) attributable to Equity holders of the parent	R$ 5052	R$ 45333	R$ 24353
Weighted average number of common shares outstanding (thousand)	27,614	27,658	27,658
Basic earnings (loss) per share - R$	R$ 0.18	R$ 1.64	R$ 0.88
Diluted earnings (loss) per share - R$	R$ 0.18	R$ 1.64	R$ 0.85

Revenue - Summary of Company's

Revenue - Summary of Company's Net Revenue (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue
Taxes	R$ 275	R$ 264	R$ 154
Returns and discounts	(54,858)	(30,456)	(35,445)
Net revenue	572,837	380,981	244,382
Revenue from contracts with customers	572,837	380,981	244,382
Goods or services transferred at point in time
Revenue
Revenue from contracts with customers	572,837	380,981	244,382
Educational content
Revenue
Gross revenue	625,150	407,599	277,596
Revenue from contracts with customers	570,179	377,143	242,086
Other
Revenue
Gross revenue	2,820	4,102	2,385
Revenue from contracts with customers	2,658	3,838	2,296
Core segments
Revenue
Revenue from contracts with customers	432,709	303,031	218,957
Core segments | Goods or services transferred at point in time
Revenue
Revenue from contracts with customers	432,709	303,031	218,957
Core segments | Educational content
Revenue
Revenue from contracts with customers	432,663	299,203	216,661
Core segments | Other
Revenue
Revenue from contracts with customers	46	3,828	2,296
Supplemental segments
Revenue
Revenue from contracts with customers	140,128	77,950	25,425
Supplemental segments | Goods or services transferred at point in time
Revenue
Revenue from contracts with customers	140,128	77,950	25,425
Supplemental segments | Educational content
Revenue
Revenue from contracts with customers	137,516	77,940	R$ 25425
Supplemental segments | Other
Revenue
Revenue from contracts with customers	R$ 2612	R$ 10

Revenue - Additional Informatio

Revenue - Additional Information (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue
Impairment losses on trade receivables arising from contracts with customers	R$ 17392	R$ 9588	R$ 5227

Expenses by Nature - Summary of

Expenses by Nature - Summary of Expenses by Nature (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Expenses by Nature
Cost of sales	R$ 117258	R$ 80745	R$ 58517
Selling expense	199,780	113,270	65,314
General and administrative expenses	191,438	129,754	48,931
Total	508,476	323,769	172,762
Content providing
Expenses by Nature
Cost of sales	61,953	41,551	34,452
Operations personnel
Expenses by Nature
Cost of sales	12,500	11,477	10,979
Inventory reserves
Expenses by Nature
Cost of sales	8,476	7,252	4,481
Freight
Expenses by Nature
Cost of sales	14,569	7,687	4,087
Depreciation and amortization
Expenses by Nature
Cost of sales	15,311	5,869	3,161
Selling expense	23,573	11,939	9,799
General and administrative expenses	9,430	1,786	1,328
Other
Expenses by Nature
Cost of sales	4,449	6,909	1,357
Selling expense	7,772	5,574	4,324
General and administrative expenses	8,302	3,744	6,763
Sales personnel
Expenses by Nature
Selling expense	87,352	49,041	26,721
Sales and marketing
Expenses by Nature
Selling expense	31,208	17,931	9,319
Customer support
Expenses by Nature
Selling expense	30,755	17,274	8,173
Allowance For Doubtful Accounts
Expenses by Nature
Selling expense	17,392	9,588	5,227
Real estate rentals
Expenses by Nature
Selling expense	1,728	1,923	1,751
General and administrative expenses	2,613	3,429	1,625
Corporate personnel
Expenses by Nature
General and administrative expenses	53,443	39,382	24,633
Third party services
Expenses by Nature
General and administrative expenses	43,415	14,269	7,814
Travel expenses
Expenses by Nature
General and administrative expenses	3,439	2,891	2,034
Tax expenses
Expenses by Nature
General and administrative expenses	2,331	2,858	1,716
Software licenses
Expenses by Nature
General and administrative expenses	1,487	1,098	1,128
Share-Based Compensation Plan
Expenses by Nature
General and administrative expenses	R$ 66978	R$ 60297	R$ 1890

Finance result - Summary of Fin

Finance result - Summary of Financial Result (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finance result
Income from financial investments	R$ 18443	R$ 11633	R$ 11415
Changes in fair value of financial investments (a)	28,886	4,322
Changes in fair value of derivative instruments (b)	18,599	19,839	258
Foreign exchange gains	1,745	138
Interest income	1,042
Other	3,332	686	858
Finance income	72,047	36,618	12,531
Changes in fair value of derivative instruments (b)	(18,126)	(19,180)	(6,915)
Changes in accounts payable to selling shareholders (Note 17)	(89,403)	(130,378)
Interest in acquisition of investments (c)	(42,206)	(9,781)	(11,179)
Financial discounts granted	(3,343)	(1,911)	(1,266)
Foreign exchange loss	(2,300)	(34,573)
Interest in lease liabilities	(1,489)
Other	(13,988)	(2,972)	(1,029)
Finance costs	(170,855)	(198,795)	(20,389)
Finance result	R$ 98808	R$ 162177	R$ 7858

Income Taxes - Reconciliation o

Income Taxes - Reconciliation of Income Tax Expense (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income taxes
Profit (loss) before income taxes	R$ 42534	R$ 100901	R$ 66356
Combined statutory income taxes rate - %	34.00%	34.00%	34.00%
Income tax benefit (expense) at statutory rates	R$ 14462	R$ 34306	R$ 22561
Reconciliation adjustments:
Share of loss of equity-accounted investees	(612)	(269)	(240)
Effect of presumed profit of subsidiaries	18,593	11,080	907
Permanent differences		(26,097)
Other additions (exclusions), net	660	(1,035)	(822)
Income taxes benefit (expense)	33,103	17,985	(22,716)
Current	(46,850)	(26,553)	(31,010)
Deferred	R$ 79953	R$ 44538	R$ 8294
Effective rate	778.00%	17.80%	34.20%

Income Taxes - Reconciliation_2

Income Taxes - Reconciliation of Income Tax Expense - Additional information (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income taxes
Combined statutory income taxes rate - %	34.00%	34.00%	34.00%
Prior gross revenue used to calculate presumed profit income tax	R$ 78000

Income Taxes - Summary of Chang

Income Taxes - Summary of Changes in the Deferred Tax Assets and Liabilities (Details) - BRL (R$) R$ in Thousands	Jan. 01, 2019	Jan. 01, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Profit or loss			R$ 79953	R$ 44538
Change in accounting practice	R$ 613	R$ 1450
Business combination			7,517
Deferred tax relating to equity			(29,417)	46,314
Deferred tax assets	100,073	7,310	156,748	99,460	R$ 5860
Deferred tax liabilities	(1,378)	(80)		(1,378)	(80)
Tax expense (income)			79,953	44,538	8,294
Deferred tax assets (liabilities), net	98,695	7,230	156,748	98,082	5,780
Deferred Tax Asset
Income Taxes
Profit or loss			85,434	51,405
Change in accounting practice	613	1,450
Business combination			7,517
Deferred tax relating to equity			(29,417)	46,314
Deferred tax assets	118,324	19,992	181,858	117,711	18,542
Deferred Tax Asset | Tax Loss Carryforward
Income Taxes
Profit or loss			11,919	757
Deferred tax assets	4,364	3,607	16,283	4,364	3,607
Deferred Tax Asset | Financial instruments from acquisition of interests
Income Taxes
Profit or loss			47,563	51,287
Deferred tax assets	59,166	7,879	106,729	59,166	7,879
Deferred Tax Asset | Other temporary differences
Income Taxes
Profit or loss			14,610	1,501
Change in accounting practice	613	1,450
Business combination			7,517
Deferred tax assets	7,198	5,084	29,325	6,585	3,634
Deferred Tax Asset | Share Based Compensation
Income Taxes
Profit or loss			7,960	(2,217)
Deferred tax assets		2,217	7,960		2,217
Deferred Tax Asset | Tax benefit from tax deductible goodwill
Income Taxes
Profit or loss			(2,009)
Deferred tax relating to equity			(29,417)	46,314
Deferred tax assets	46,314		14,888	46,314
Deferred Tax Asset | Amortised Intangible Assets
Income Taxes
Profit or loss			5,391	77
Deferred tax assets	1,282	1,205	6,673	1,282	1,205
Deferred income tax liabilities
Income Taxes
Profit or loss			(5,481)	(6,867)
Deferred tax liabilities	(19,629)	(12,762)	(25,110)	(19,629)	(12,762)
Deferred income tax liabilities | Financial instruments from acquisition of interests
Income Taxes
Profit or loss			(5,707)	(5,752)
Deferred tax liabilities	(18,166)	(12,414)	(23,873)	(18,166)	(12,414)
Deferred income tax liabilities | Other temporary differences
Income Taxes
Profit or loss			226	(1,115)
Deferred tax liabilities	R$ 1463	R$ 348	R$ 1237	R$ 1463	R$ 348

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Unrecognized deferred income tax assets	R$ 1382	R$ 3545
Maximum
Income Taxes
Maximum percentage of compensation limited to annual taxable income	30.00%

Segment Information - Additiona

Segment Information - Additional Information (Details) - BRL (R$)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment information
Percentage of total revenue	5.00%	5.00%
Inter-segment revenue	R$ 0	R$ 0	R$ 0

Segment Information - Summary o

Segment Information - Summary of Operating Segments (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment Information
Revenue	R$ 572837	R$ 380981	R$ 244382
Cost of sales	(117,258)	(80,745)	(58,517)
Gross profit	455,579	300,236	185,865
Selling expenses	(199,780)	(113,270)	(65,314)
Segment profit		186,966	120,551
General and administrative expenses	(191,438)	(129,754)	(48,931)
Other income (expenses), net	(6,287)	4,856	3,299
Operating profit	58,074	62,068	74,919
Finance income	72,047	36,618	12,531
Finance costs	(170,855)	(198,795)	(20,389)
Share of loss of equity-accounted investees	(1,800)	(792)	(705)
Profit (loss) before income taxes	(42,534)	(100,901)	66,356
Income taxes (income) expense	33,103	17,985	(22,716)
Profit (loss) for the year	(9,431)	(82,916)	43,640
Total assets	3,161,423	1,334,878
Total liabilities	1,566,613	264,994
Other disclosures
Depreciation and amortization	48,314	19,594	14,288
Investments in associates and joint ventures	48,574	11,862	12,654
Capital expenditures	54,093	36,257	11,383
Reportable segments
Segment Information
Revenue	572,837	380,981	244,382
Cost of sales	(117,258)	(80,745)	(58,517)
Gross profit	455,579	300,236	185,865
Selling expenses		(113,270)	(65,314)
Segment profit		186,966	120,551
Total assets	3,175,693	1,335,113
Total liabilities	1,580,883	265,229
Other disclosures
Depreciation and amortization	48,314	19,594	14,288
Investments in associates and joint ventures	48,574	11,862	12,654
Capital expenditures	54,093	36,257	11,383
Reportable segments | Core segments
Segment Information
Revenue	433,372	303,031	218,957
Cost of sales	(97,513)	(70,903)	(54,317)
Gross profit	335,859	232,128	164,640
Selling expenses		(87,186)	(56,318)
Segment profit		144,942	108,322
Total assets	2,999,497	1,273,107
Total liabilities	1,535,695	254,744
Other disclosures
Depreciation and amortization	43,854	17,997	12,650
Investments in associates and joint ventures	48,574	11,862	12,654
Capital expenditures	45,851	28,165	7,183
Reportable segments | Supplemental segments
Segment Information
Revenue	139,465	77,950	25,425
Cost of sales	(19,745)	(9,842)	(4,200)
Gross profit	119,720	68,108	21,225
Selling expenses		(26,084)	(8,996)
Segment profit		42,024	12,229
Total assets	176,196	62,006
Total liabilities	45,188	10,485
Other disclosures
Depreciation and amortization	4,460	1,597	1,638
Capital expenditures	8,242	8,092	R$ 4200
Elimination of intersegment amounts
Segment Information
Total assets	(14,270)	(235)
Total liabilities	R$ 14270	R$ 235

Financial Instruments - Summary

Financial Instruments - Summary of Financial Assets (Details) R$ in Thousands, $ in Thousands	Dec. 31, 2019USD ($)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
Financial Instruments
Cash and cash equivalents	$ 6,197	R$ 48900	R$ 12301	R$ 834	R$ 4358
Financial investments		579,494	811,159
Trade receivables		329,428	136,611
Financial instruments from acquisition of interests		35,946	26,630
Related parties		16,111	1,226
Other assets		4,109
Total financial assets		1,013,988	987,927
Financial assets at fair value through profit or loss
Financial Instruments
Cash and cash equivalents		48,900	12,301
Financial investments		498,584	2,370
Financial instruments from acquisition of interests		35,946	26,630
Total financial assets		583,430	41,301
At Amortized Cost
Financial Instruments
Financial investments		80,910	808,789
Trade receivables		329,428	136,611
Related parties		16,111	1,226
Other assets		4,109
Total financial assets		R$ 430558	R$ 946626

Financial Instruments - Summa_2

Financial Instruments - Summary of Financial Liabilities (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Financial Instruments
Trade payables	R$ 34521		R$ 14845
Financial instruments from acquisition of interests	33,940		25,097
Accounts payable to selling shareholders	1,216,232		181,381
Lease liabilities	25,857	R$ 20089
Loans and financing	98,561		0
Financial liabilities	1,409,111		221,323
Financial liabilities at fair value through profit or loss
Financial Instruments
Financial instruments from acquisition of interests	33,940		25,097
Accounts payable to selling shareholders	328,668
Financial liabilities	362,608		25,097
At Amortized Cost
Financial Instruments
Trade payables	34,521		14,845
Accounts payable to selling shareholders	887,564		181,381
Lease liabilities	25,857
Loans and financing	98,561
Financial liabilities	R$ 1046503		R$ 196226

Financial Instruments - Additio

Financial Instruments - Additional Information (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financial instruments
Fixed rate of return on multimarket investment fund	99.37%
Finance income (costs) in profit and loss	R$ 473	R$ 659	R$ 6657

Financial Instruments - Summa_3

Financial Instruments - Summary of Assets and Liabilities Recognized at Fair Value (Details) R$ in Thousands, $ in Thousands	Dec. 31, 2019USD ($)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
Financial assets
Cash and cash equivalents	$ 6,197	R$ 48900	R$ 12301	R$ 834	R$ 4358
Derivative financial instruments		35,946	26,630
Financial liabilities
Derivative financial instruments		33,940	25,097
Accounts payable to selling shareholders		1,216,232	181,381
Level 2
Financial assets
Cash and cash equivalents		48,900	12,301
Financial investments		498,584	2,370
Level 3
Financial assets
Derivative financial instruments		35,946	26,630
Financial liabilities
Derivative financial instruments		33,940	R$ 25097
Accounts payable to selling shareholders		R$ 328668

Financial Instruments - Summa_4

Financial Instruments - Summary of Recurring of Fair Value Measurements (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Risk
Beginning balance	R$ 25097
Ending balance	(33,940)	R$ 25097
Level 3
Risk
Beginning balance	(25,097)
Ending balance	(33,940)	(25,097)
Recurring | Level 3
Risk
Beginning balance	(174,410)	(36,630)
Acquisition of Nave Vela	(58,194)
Payment of acquisition of Nave Vela	21,098
Changes in accounts payable to selling shareholders	(89,403)	(129,430)
Interest expense	(35,127)	(8,350)	R$ 6486
Acquisitions			(30,144)
Fair value held in step acquisitions	7,368
Ending balance	(328,668)	(174,410)	(36,630)
Recurring | Derivative Assets | Level 3
Risk
Beginning balance	26,630	12,511	20,610
Disposals			(4,542)
Gains (losses) recognized in statement of income (loss)	9,316	14,119	(3,557)
Ending balance	35,946	26,630	12,511
Recurring | Derivative Liabilities | Level 3
Risk
Beginning balance	(25,097)	(13,637)	(30,076)
Payment of capital increase in Geekie		2,000
Acquisitions			(364)
Deferred revenue in Escola de Aplicao So Jos dos Campos	54	50	51
Disposals			19,852
Gains (losses) recognized in statement of income (loss)	(8,897)	(13,510)	(3,100)
Ending balance	R$ 33940	R$ 25097	R$ 13637

Risk - Summary of Company's Exp

Risk - Summary of Company's Exposure to Foreign Currency Risk (Details) R$ in Thousands, $ in Thousands	Dec. 31, 2019USD ($)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
Risk
Cash and cash equivalents (Note 5)	$ 6,197	R$ 48900	R$ 12301	R$ 834	R$ 4358
Financial investments		577,398	810,812
Currency risk
Risk
Cash and cash equivalents (Note 5)		23,346	R$ 3615
Financial investments		R$ 1629

Risk - Additional Information (

Risk - Additional Information (Details) R$ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019USD ($)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
Risk
Cash and cash equivalents	$ 6,197	R$ 48900	R$ 12301	R$ 834	R$ 4358
CDI rate	4.21%
Base scenario
Risk
Exchange rate	4.0301	4.0301
Base scenario | U.S. Dollars
Risk
Exchange rate	4.0301	4.0301
Scenario 1
Risk
Exchange rate	4.4331	4.4331
Percentage increase in foreign exchange rate	10.00%
Foreign exchange gain	4.4331
Scenario 2
Risk
Exchange rate	3.6271	3.6271
Foreign exchange gain	3.6271
Percentage decrease in foreign exchange rate	10.00%

Risk - Summary of Sensitivity A

Risk - Summary of Sensitivity Analysis for the Cash and Cash Equivalents With Subject to Foreign Exchange Rate (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
Risk
Finance income (costs)	R$ 98808	R$ 162177	R$ 7858
Base scenario
Risk
Exchange rate	4.0301
Scenario 1
Risk
Exchange rate	4.4331
Finance income (costs)	R$ 2497
Scenario 2
Risk
Exchange rate	3.6271
Finance income (costs)	R$ 2497

Risk - Maturity Profile of the

Risk - Maturity Profile of the Company's Financial Liabilities Based on Contractual Undiscounted Amounts (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Risk
Trade payables	R$ 34521		R$ 14845
Lease liabilities	25,857	R$ 20089
Loans and financing	98,561		0
Financial instruments from acquisition of interests	33,940		25,097
Accounts payable to selling shareholders	1,216,232		181,381
Financial liabilities	1,409,111		221,323
Liquidity risk
Risk
Trade payables	34,521		14,845
Lease liabilities	25,857
Loans and financing	98,561
Financial instruments from acquisition of interests	33,940		25,097
Accounts payable to selling shareholders	1,216,232		181,381
Financial liabilities	1,409,111		221,323
Less than 3 months | Liquidity risk
Risk
Trade payables	34,521		14,845
Lease liabilities	2,037
Financial instruments from acquisition of interests			13
Financial liabilities	36,558		14,858
3 to 12 months | Liquidity risk
Risk
Lease liabilities	4,808
Loans and financing	98,561
Financial instruments from acquisition of interests			38
Accounts payable to selling shareholders	117,959		830
Financial liabilities	221,328		868
1 to 5 years | Liquidity risk
Risk
Lease liabilities	19,012
Financial instruments from acquisition of interests	33,940		25,046
Accounts payable to selling shareholders	1,098,273		180,551
Financial liabilities	R$ 1151225		R$ 205597

Risk - Summary of the Scenarios

Risk - Summary of the Scenarios Estimated by Management and the Effect on Profit Before Income Taxes (Details) - Interest rate risk R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)
Exposure | Cash, bank deposits and cash equivalents
Risk
Effect of change in CDI rate on profit before income taxes	R$ 25554
Exposure | Financial Investments
Risk
Effect of change in CDI rate on profit before income taxes	577,865
Exposure | Accounts payable to selling shareholders
Risk
Effect of change in CDI rate on profit before income taxes	879,111
Exposure | Related parties
Risk
Effect of change in CDI rate on profit before income taxes	14,813
Exposure | Loans and financing
Risk
Effect of change in CDI rate on profit before income taxes	98,561
+ 10 % | Cash, bank deposits and cash equivalents
Risk
Effect of change in CDI rate on profit before income taxes	108
+ 10 % | Financial Investments
Risk
Effect of change in CDI rate on profit before income taxes	2,433
+ 10 % | Accounts payable to selling shareholders
Risk
Effect of change in CDI rate on profit before income taxes	3,701
+ 10 % | Related parties
Risk
Effect of change in CDI rate on profit before income taxes	62
+ 10 % | Loans and financing
Risk
Effect of change in CDI rate on profit before income taxes	415
-10 % | Cash, bank deposits and cash equivalents
Risk
Effect of change in CDI rate on profit before income taxes	(108)
-10 % | Financial Investments
Risk
Effect of change in CDI rate on profit before income taxes	(2,433)
-10 % | Accounts payable to selling shareholders
Risk
Effect of change in CDI rate on profit before income taxes	(3,701)
-10 % | Related parties
Risk
Effect of change in CDI rate on profit before income taxes	(62)
-10 % | Loans and financing
Risk
Effect of change in CDI rate on profit before income taxes	R$ 415

Risk - Summary of Changes in Li

Risk - Summary of Changes in Liabilities Arising From Financing Activities (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Risk
Beginning balance	R$ 0	R$ 10511	R$ 17843
Cash flows	91,752	(85,000)	(75,053)
Other	12,577	74,489	67,721
Ending balance	124,418	0	10,511
Change in accounting practice
Risk
Beginning balance	20,089
Ending balance		20,089
Loans and financing
Risk
Beginning balance	0
Cash flows	97,011
Other	1,550
Ending balance	98,561	0
Loans and financing | Change in accounting practice
Risk
Beginning balance	0
Ending balance		0
Dividends payable
Risk
Beginning balance	0	10,511	17,843
Cash flows		(85,000)	(75,053)
Other		74,489	67,721
Ending balance		0	R$ 10511
Leases
Risk
Beginning balance	0
Cash flows	(5,259)
Other	11,027
Ending balance	25,857	0
Leases | Change in accounting practice
Risk
Beginning balance	R$ 20089
Ending balance		R$ 20089

Risk - Changes in liabilities a

Risk - Changes in liabilities arising from investing activities under sensitivity analysis (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)
Scenario 1 | + 10 %
Disclosure of nature and extent of risks arising from financial instruments [line items]
Revenue	R$ 23413
Scenario 1 | -10 %
Disclosure of nature and extent of risks arising from financial instruments [line items]
Revenue	(23,413)
Scenario 2 | + 5%
Disclosure of nature and extent of risks arising from financial instruments [line items]
Weighted average cost of capital	3,510
Scenario 2 | - 5%
Disclosure of nature and extent of risks arising from financial instruments [line items]
Weighted average cost of capital	R$ 3510

Commitments and Contingencies -

Commitments and Contingencies - Summary of Rollforward of Legal Proceedings (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Commitments and contingencies
Beginning balance	R$ 131	R$ 0
Additions	354	141
Reversals	(234)	(10)
Ending Balance	251	131
Labor
Commitments and contingencies
Beginning balance	17	0
Additions	209	17
Reversals	(104)
Ending Balance	122	17
Taxes
Commitments and contingencies
Beginning balance	114	0
Additions	145	124
Reversals	(130)	(10)
Ending Balance	R$ 129	R$ 114

Commitments and Contingencies_2

Commitments and Contingencies - Summary of Litigation Settlement (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Commitments and contingencies
Losses on litigation settlements	R$ 7209	R$ 5170
International School Servicos de Ensino, Treinamento e Editoracao, Franqueadora S.A. ("International School")
Commitments and contingencies
Recognized interest expense	33,909
Increase in accounts payable to sale of share holders	89,403
Civil
Commitments and contingencies
Losses on litigation settlements	6,113	4,425
Labor
Commitments and contingencies
Losses on litigation settlements	R$ 1096	R$ 745

Transactions Not Involving Ca_3

Transactions Not Involving Cash - Summary of Non-cash Activities, Which Are Not Included in Statements of Cash Flow (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Transactions not involving cash
Share issuance costs - unpaid		R$ 674
Tax benefit from tax deductible goodwill (Note 19d)	R$ 46314	R$ 46314
Investing - accounts payable to selling shareholders			R$ 58003
Investing - derivative financial instruments (Note 2.2)	14,597
Business combinations - derivative financial instruments (Note 2.2)	38,924
Lease adoption (Note 2.5)	1,251
Forward contract - Nave (Note 4)	29,728
Retained payments from business combination (Note 4)	874,440
Acquisition from business combination (Note 4)	R$ 39419

Subsequent Events (Details)

Subsequent Events (Details) - BRL (R$) R$ in Thousands	Mar. 04, 2020	Oct. 31, 2019	May 31, 2019	Dec. 31, 2019	Feb. 17, 2020
Geekie Desenvolvimento de Softwares S.A.
Subsequent events
Equity interest held in subsidiary				37.50%
Nave a Vela Ltda. ("Nave")
Subsequent events
Percentage of equity interest acquired			13.20%
Equity interest held in subsidiary		51.00%		51.00%
Loan Agreement | Geekie Desenvolvimento de Softwares S.A. | 7.82% loan agreement due April 15, 2021
Subsequent events
Loan agreement, face amount					R$ 1500
Interest rate					7.82%
Loan Agreement | Nave a Vela Ltda. ("Nave") | 8.08% loan agreement due March 8, 2022
Subsequent events
Loan agreement, face amount					R$ 2000
Interest rate					8.08%
Acquisition of additional shares, equity interest | Geekie Desenvolvimento de Softwares S.A.
Subsequent events
Percentage of equity interest acquired	10.51%
Value of additional shares aquired	R$ 12675
Equity interest held in subsidiary	48.04%