A staggering $518 billion was written off companies’ books through impairment charges in 2020 amidst the COVID-19 pandemic. $203.3 billion of that came from impairments related to property, plants and equipment (PPE). PPE impairments are typically very costly. Part of this relates to PPE impairments of mining rights and oil & gas reserves. Historically, this type of impairment averages the most costly charges. As evidenced by looking at annual aggregate impairment charges broken down by asset type, PPE and goodwill are consistently the most costly.
Here, Audit Analytics further examines the substantial PPE impairment charges during the pandemic.