Helicopter engines are usually derated because of the gearbox limits. Let's say you want 200 horsepower. If you put in a 200 horsepower engine, as soon as you climb to altitude you will lose performance as the manifold pressure drops. To get your 200 horsepower back you could turbocharge it which would be expensive, or you could start with a bigger engine and derate it. The Derate is simply a red line on the manifold pressure gauge equating to 200 hp. You only have atmospheric pressure pushing air into the engine and all engines will reduce in power as you climb - so essentially you start off with a bigger engine. Having a derate means you can never use full throttle at sea level hence icing becomes an issue.