The value relevance of financial assets in listed brazillian electric utility firms

Abstract

The financial statements of electric utility firms underwent significant changes after the process of convergence of Brazilian accounting to IFRS. Considering that one of the main changes is the breakdown of fixed assets into financial assets and/or intangible assets, this study aimed to verify the relevance of financial assets registered in the concession agreement to explain the price variation of Brazillian electric utility firms between 2010 and 2018. The data were collected on the B³ website and Economatica® database and the analysis was done through multiple regressions with panel data. Two models, based on the Ohlson Model, were estimated to test the research hypothesis that net income, equity and financial assets per share are relevant information to explain the share price behavior of companies. The results indicated that, at the level of statistical significance of 0.01% and 1%, investors react positively to this information and demonstrated a 15% gain in explanatory power of the model after adding the variable financial assets per share. Thus, it can be said that the values of the financial assets related to the concession contracts generate information relevant to the capital market and that the change in the classification of fixed assets may be an attempt to make the financial statements closer to the reality of the company.