Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount

34 | Notes to Condensed Consolidated Financial Statements—(Continued) | September 30, 2022 and 2021of our last impairment test. These changes to the inputs of our discount rate may negatively impact our annual goodwill impairment test as of October 1, 2022. The analysis of the cash flows to which these inputs are applied is currently in process. It is currently not known if these inputs to the discount rate are significant enough to result in an impairment of goodwill.Should the fair value of any of the Company’s reporting units fall below its carrying amount as a result of these inputs or other changes such as reduced operating performance, market declines, changes in the discount rate, regulatory changes, or other adverse conditions, goodwill impairment charges may be necessary in future periods.Alto Maipo — On August 27, 2021, Alto Maipo updated its creditors with respect to the construction budget and long-term business plan for the project, which considers different scenarios for spot prices, decarbonization initiatives, and hydrological conditions, among other significant variables. Under some of these scenarios, Alto Maipo may experience reduced future cash flows, which would limit its ability to repay debt. Alto Maipo’s management initiated negotiations with its creditors to restructure its obligations and achieve a sustainable long-term capital structure for Alto Maipo. On November 17, 2021, Alto Maipo SpA commenced a reorganization proceeding in accordance with Chapter 11 of the U.S. Bankruptcy Code, through a voluntary petition. Consequently, after the Chapter 11 filing, the Company is no longer considered to have control over Alto Maipo, which resulted in its deconsolidation. The Company recognized an after-tax loss of approximately $1.2 billion, net of noncontrolling interests, in the Consolidated Statement of Operations in the fourth quarter of 2021, associated with the loss of control attributable to the former controlling interest.On May 26, 2022, Alto Maipo emerged from bankruptcy in accordance with Chapter 11 of the U.S. Bankruptcy Code. Alto Maipo, as restructured, is considered a VIE. As the Company lacks the power to make significant decisions, it does not meet the criteria to be considered the primary beneficiary of Alto Maipo and therefore will not consolidate this entity. The Company has elected the fair value option to account for its investment in Alto Maipo. If Alto Maipo is unable to meet its obligations under the restructured arrangements as they come due, the creditors may enforce their rights under the credit agreements. These finance agreements are non-recourse with respect to The AES Corporation.21. SUBSEQUENT EVENTS Southland Energy — On November 3, 2022, the Company signed an agreement to sell an additional 14.9% of its ownership interest in the Southland repowering assets (“Southland Energy”). Once this sale is completed, AES will hold 50.1% of Southland Energy’s interest. The transaction is expected to close during the fourth quarter of 2022 and is expected to be accounted for as an equity transaction, with no gain or loss recognized in the financial statements. Southland Energy is expected to continue being consolidated by the Company within the US and Utilities SBU reportable segment.  

