The indicators and the determinants of the decision of recognition of the impairment loss of fixed assets- evidence from companies listed on the Egyptian Stock Exchange

This study aims to evaluate the accounting practice of the decision of recognition of the impairment loss of fixed assets by Egyptian companies, and the extent to which this practice complies with the requirements of Egyptian Accounting Standard No. (31) “Asset impairment” and the International Accounting Standard IAS (36). This study used a sample of Egyptian listed firms during (2013-2020). The study tested the relationship between a set of internal and external indicators of the impairment of fixed assets and the decision of recognition of the impairment loss of fixed assets. And tested the determinants of the decision of recognition of the impairment of fixed assets. Based on logistic regression analysis, the results indicate that the indicator of the increase in the book value of equity over its market value, is considered the most relevant indicator of the decision of recognition of the impairment loss of fixed assets. The findings of the study provide evidence that firm size, the density of fixed assets and the level of liquidity are positively related to the decision of recognition of the impairment loss of fixed assets. Conversely, the results show a negative relationship between the level of financial leverage and the decision of recognition of the impairment loss of fixed assets.