Disclosure of provisions and contingent liabilities: a study of companies in the airline sector during the Covid-19 pandemic

Abstract

Purpose: The objective of this article is to analyze the impact of the Covid-19 pandemic on the disclosure of provisions and contingent liabilities in the financial statements of airlines listed on B3. Methodology: The research adopted a qualitative approach through documentary analysis of financial statements. The analysis period covers the years 2019 to 2022. The sample consisted of Brazilian airlines listed on Brasil, Bolsa, Balcão (B3). Results: The study reveals that the COVID-19 pandemic has impacted the airline industry, resulting in an increase in provisions for the return of aircraft and engines, variations in provisions for onerous contracts, and challenges in managing contractual obligations. Although companies are in compliance with the requirements of CPC 25, an inconsistency in the level of detail of financial statements was identified between different companies. Contributions of the Study: The study provides a detailed analysis of airline companies' compliance with CPC 25 guidelines, highlighting how the impact of the COVID-19 pandemic has influenced companies' adaptation to new market realities. The study also explores changes in strategies adopted by companies. Furthermore, by integrating theoretical and practical aspects of accounting standards, it contributes to advancing discussions among academics and professionals on best practices, with a specific focus on CPC 25.

Keywords

• Disclosure; Provisions; Contingent Liabilities; Airline sector.