lnIMP |
Dependent variable |
Natural logarithm of (recordings of impairments - reversals of impairments)t/[(TAt +TAt-1)/2] b |
- |
Peetathawatchai & Acaranupong (2012Peetathawatchai, P., & Acaranupong, K. (2012). Are impairment indicators and losses associated in Thailand? Journal of Financial Reporting and Accounting, 10(1), 95-114. https://doi.org/10.1108/19852511211237462 https://doi.org/10.1108/1985251121123746...
), Wrubel et al. (2015Wrubel, F., Marassi, R. B., & Klann, R. (2015). Determinantes do reconhecimento de perdas por impairment em empresas brasileiras. RACEF - Revista de Administração, Contabilidade e Economia da FUNDACE, 6(1), 126-128. https://doi.org/10.13059/racef.v6i1.248 https://doi.org/10.13059/racef.v6i1.248...
) |
CovidRel |
Binary variable |
1 for disclosure of impairment related to the covid-19 crisis, among other factors, and 0 otherwise |
(+) Covid-19 would cause more impairment (disclosure). |
- |
CrisisYear |
Binary variable |
1 for years with negative growth of the Brazilian GDP (2016 and 2020) and 0 otherwise |
(+) The economic crisis scenario (negative GDP) would cause more losses. |
Gunn et al. (2018Gunn, J. L., Khurana, I. K., & Stein, S. E. (2018). Determinants and consequences of timely asset impairments during the financial crisis. Journal of Business Finance & Accounting, 45(1-2), 3-39. https://doi.org/10.1111/jbfa.12287 https://doi.org/10.1111/jbfa.12287...
) |
ΔREV |
Change in net revenue over average total assets |
(REVt - REVt-1)/[(TAt +TAt-1)/2] |
(-) Companies with a negative change in revenue would be more susceptible to impairment. |
Abughazaleh et al. (2011AbuGhazaleh, N. M., Al-Hares, O. M., & Roberts, C. (2011). Accounting discretion in goodwill impairments: UK evidence. Journal of International Financial Management and Accounting, 22(3), 165-204. https://doi.org/10.1111/j.1467-646X.2011.01049.x https://doi.org/10.1111/j.1467-646X.2011...
), Alves & Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
), Peetathawatchai & Acaranupong (2012Peetathawatchai, P., & Acaranupong, K. (2012). Are impairment indicators and losses associated in Thailand? Journal of Financial Reporting and Accounting, 10(1), 95-114. https://doi.org/10.1108/19852511211237462 https://doi.org/10.1108/1985251121123746...
), Vogt et al. (2016Vogt, M., Pletsch, C. S., Morás, V. R., & Klann, R. C. (2016). Determinants of goodwill impairment loss recognition. Revista Contabilidade & Finanças, 27(72), 349-362. https://doi.org/10.1590/1808-057x201602010 https://doi.org/10.1590/1808-057x2016020...
), Wrubel et al. (2015Wrubel, F., Marassi, R. B., & Klann, R. (2015). Determinantes do reconhecimento de perdas por impairment em empresas brasileiras. RACEF - Revista de Administração, Contabilidade e Economia da FUNDACE, 6(1), 126-128. https://doi.org/10.13059/racef.v6i1.248 https://doi.org/10.13059/racef.v6i1.248...
) |
ΔROA |
Change in return on total assets |
(Net Proft /TAt) - (Net Proft-1/TAt-1) |
(-) Less profitable companies would be more likely to record impairments. |
Abughazaleh et al. (2011AbuGhazaleh, N. M., Al-Hares, O. M., & Roberts, C. (2011). Accounting discretion in goodwill impairments: UK evidence. Journal of International Financial Management and Accounting, 22(3), 165-204. https://doi.org/10.1111/j.1467-646X.2011.01049.x https://doi.org/10.1111/j.1467-646X.2011...
), Alves 7 Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
), Vogt et al. (2016Vogt, M., Pletsch, C. S., Morás, V. R., & Klann, R. C. (2016). Determinants of goodwill impairment loss recognition. Revista Contabilidade & Finanças, 27(72), 349-362. https://doi.org/10.1590/1808-057x201602010 https://doi.org/10.1590/1808-057x2016020...
) |
ΔROE |
Change in return on equity |
(Net Proft /Net) - (Net Proft-1/Net-1) |
(+) Companies with a positive change in return on equity would be more likely to record impairments. |
Alves & Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
) |
ΔOCF |
Change in operating cash flow over average total assets |
(OCFt - OCFt-1)/[(TAt +TAt-1)/2] |
(-) Companies with a negative change in cash flow would be more susceptible to impairment. |
Abughazaleh et al. (2011AbuGhazaleh, N. M., Al-Hares, O. M., & Roberts, C. (2011). Accounting discretion in goodwill impairments: UK evidence. Journal of International Financial Management and Accounting, 22(3), 165-204. https://doi.org/10.1111/j.1467-646X.2011.01049.x https://doi.org/10.1111/j.1467-646X.2011...
), Alves & Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
), Peetathawatchai & Acaranupong (2012Peetathawatchai, P., & Acaranupong, K. (2012). Are impairment indicators and losses associated in Thailand? Journal of Financial Reporting and Accounting, 10(1), 95-114. https://doi.org/10.1108/19852511211237462 https://doi.org/10.1108/1985251121123746...
), Vogt et al. (2016Vogt, M., Pletsch, C. S., Morás, V. R., & Klann, R. C. (2016). Determinants of goodwill impairment loss recognition. Revista Contabilidade & Finanças, 27(72), 349-362. https://doi.org/10.1590/1808-057x201602010 https://doi.org/10.1590/1808-057x2016020...
), Wrubel et al. (2015Wrubel, F., Marassi, R. B., & Klann, R. (2015). Determinantes do reconhecimento de perdas por impairment em empresas brasileiras. RACEF - Revista de Administração, Contabilidade e Economia da FUNDACE, 6(1), 126-128. https://doi.org/10.13059/racef.v6i1.248 https://doi.org/10.13059/racef.v6i1.248...
) |
Book-to-Market |
Book-to-market ratio |
(NE + IMP*0.66)/market value |
(+) Companies with higher book-to-market ratios would be more susceptible to impairment. |
Abughazaleh et al. (2011AbuGhazaleh, N. M., Al-Hares, O. M., & Roberts, C. (2011). Accounting discretion in goodwill impairments: UK evidence. Journal of International Financial Management and Accounting, 22(3), 165-204. https://doi.org/10.1111/j.1467-646X.2011.01049.x https://doi.org/10.1111/j.1467-646X.2011...
), Alves & Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
), Vogt et al. (2016Vogt, M., Pletsch, C. S., Morás, V. R., & Klann, R. C. (2016). Determinants of goodwill impairment loss recognition. Revista Contabilidade & Finanças, 27(72), 349-362. https://doi.org/10.1590/1808-057x201602010 https://doi.org/10.1590/1808-057x2016020...
), |
SIZE |
Size |
Total assets (natural logarithm of total assets) for year t |
(+) Big companies would be more susceptible to the risk of impairment. |
Souza et al. (2015Souza, M. M., Borba, J. A., Wuerges, A. F. E., & Lunkes, R. J. (2015). Perda no valor recuperável de ativos: fatores explicativos do nível de evidenciação das empresas de capital aberto brasileiras. Revista Universo Contábil, 11(2), 6-24. https://proxy.furb.br/ojs/index.php/universocontabil/article/view/3872/3025 https://proxy.furb.br/ojs/index.php/univ...
) |
Control variables (incentives for earnings management)
|
LEV |
Leverage |
(CLt + nCLt)/[(TAt + TAt-1)/2] |
(-) More leveraged companies would be less inclined to record impairments. |
Vogt et al. (2016Vogt, M., Pletsch, C. S., Morás, V. R., & Klann, R. C. (2016). Determinants of goodwill impairment loss recognition. Revista Contabilidade & Finanças, 27(72), 349-362. https://doi.org/10.1590/1808-057x201602010 https://doi.org/10.1590/1808-057x2016020...
), Zang (2008Zang, Y. (2008). Discretionary behavior with respect to the adoption of SFAS no. 142 and the behavior of security prices. Review of Accounting and Finance, 7(1), 38-68. https://doi.org/10.1108/14757700810853842 https://doi.org/10.1108/1475770081085384...
) |
Smooth |
Binary variable (income smoothing) |
1 if the profit before current impairment for year t is positive and greater than the net profit in t-1, and 0 otherwise |
(+) Companies with high profits would be more inclined to record impairments. |
Abughazaleh et al. (2011AbuGhazaleh, N. M., Al-Hares, O. M., & Roberts, C. (2011). Accounting discretion in goodwill impairments: UK evidence. Journal of International Financial Management and Accounting, 22(3), 165-204. https://doi.org/10.1111/j.1467-646X.2011.01049.x https://doi.org/10.1111/j.1467-646X.2011...
), Alves & Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
) |
BigBath |
Binary variable (negative current income) |
1 if the profit before current impairment for year t is negative and less than the net profit in t-1, and 0 otherwise |
(+) Companies with negative earnings would be more inclined to record impairments. |
Abughazaleh et al. (2011AbuGhazaleh, N. M., Al-Hares, O. M., & Roberts, C. (2011). Accounting discretion in goodwill impairments: UK evidence. Journal of International Financial Management and Accounting, 22(3), 165-204. https://doi.org/10.1111/j.1467-646X.2011.01049.x https://doi.org/10.1111/j.1467-646X.2011...
), Alves & Silva (2020Alves, K. R. C. P, & Silva, C. A. T. (2020). Determinantes do reconhecimento da perda pelo impairment test. Revista Ambiente Contábil -Universidade Federal do Rio Grande do Norte, 12(2), 112-135. https://doi.org/10.21680/2176-9036.2020v12n2ID19759 https://doi.org/10.21680/2176-9036.2020v...
), Gonçalves et al. (2019Gonçalves, C., Ferreira, L., Rebelo, E., & Fernandes, J. S. (2019). Big bath and goodwill impairment. Revista Brasileira de Gestão de Negócios, 21(2), 312-331. https://doi.org/10.7819/rbgn.v21i2.3977 https://doi.org/10.7819/rbgn.v21i2.3977...
) |