Asset Impairment and Influencing Factors: Explanatory Variables for Impairment Losses in Listed Electric Utility Companies (RACI - Revista Administração e Contábeis IDEAU)

Summary

• The study covers the period from 2018 to 2023 and a final sample of 28 listed electric power companies.p.2
• Of the 64 companies listed on B3, only 28 reported impairment losses in at least one year and form the final sample.p.9
• Between 17 and 25 companies recorded impairment losses each year, less than 40% of the 64 listed companies.p.9
• Of the 168 observations in the sample, 133 were usable in an unbalanced panel.p.10
• Shareholder concentration is the only variable with a significant p-value (0.029) and a negative coefficient, linking higher concentration to lower recognized impairment losses.p.15
• The COVID-19 dummy has a p-value of 0.557, so the regression finds no sufficient evidence that the pandemic affected impairment recognition.p.14

Key insights

1. The year with the highest incidence of impairment losses was 2021.p.16
2. Company size has a p-value of 0.059, suggesting that larger companies tend to recognize more impairment losses, although this cannot be stated categorically.p.14
3. Market value is not statistically significant, with a p-value of 0.484.p.15
4. Shareholder concentration shows a p-value of 0.029, the only one below 0.05 among the tested variables.p.15
5. The sample is restricted to 28 companies listed on B3, which may not fully represent the Brazilian energy sector.p.17
6. Intangible assets showed larger impairment losses than tangible fixed assets, according to the descriptive averages.p.12