Non-current assets held for sale and discontinued operations: an analysis in the level of evidence and the characteristics of publicly traded Brazilian companies

Abstract

Purpose: The objective of this research is to analyze the level of disclosure and the characteristics of publicly traded Brazilian companies in relation to non-current assets held for sale and discontinued operations. Methodology: To analyze the level of disclosure, a checklist was created based on CPC 31 (2009). This study is classified as documentary, considering that the Notes to the Financial Statements, the Balance Sheet and the Statement of Income for the Year of the companies included in the sample were analyzed. The problem approach was qualitative. The sample consists of all companies in Brazil, Bolsa, Balcão (B3) that presented non-current assets held for sale (NCAHS) and / or discontinued operations (DO) in 2018, which corresponds to 67 companies divided into 10 operating sectors. The characteristics analyzed were: sector of activity, corporate governance, profitability, auditing company, and shares are traded on the New York Stock Exchange (NYSE). Results: The results suggest that companies that fall under the New Market, have negative profitability and trade shares on the NYSE tend, on average, to perform a higher level of disclosure of NCAHS and DO. The sectors with the highest concentration of NCAHS and DO were Industrial Goods and Cyclic Consumption, both comprising 16 companies out of 67 in the sample. The nature of NCAHS that stood out the most were the subsidiaries, with 49% representativeness. It was observed that companies still need to improve their disclosure, as the sample average was 44%. Contributions of the Study: The realization of the present investigation contributes in the sense that the accounting practice pertaining to NCAHS and DO is relatively recent in Brazil and many academics may still have doubts about the subject, considering that the accounting pronouncement CPC 31 brought new disclosure procedures. In this sense, this research contributes towards presenting the way in which Brazilian public companies are showing NCAHS and DO in an updated context, demonstrating that they need to improve the level of information disclosed to fully comply with CPC 31.

Keywords

• non-current assets held for sale; discontinued operations; cpc 31; ifrs 5; disclosure.