Determinants of Fixed Asset Revaluation Decision and Its Impacts on Market Reaction: A Comparative Study in Indonesia and Singapore

Fathmaningrum, Erni Suryandari; Yudhanto, Satrio Kusumo

doi:10.18196/jai.2002118

Cited by 4 publications

(13 citation statements)

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“…The multiple regression results are presented in Table 3. We suggest that the information of upward asset revaluation in Indonesia is value-relevant to support the results of Fathmaningrum and Yudhanto (2019) and Pascayanti et al (2017).…”

Section: Resultssupporting

confidence: 63%

“…Our study contributes to filling the gap of previous results related to value relevance of fair value disclosure of fixed assets that are still getting minimal attention by academics today (Fathmaningrum & Yudhanto, 2019;Israeli, 2015). Prior empirical research on fair value measurement is mostly limited to financial instruments (McInnis et al, 2018;Pascayanti, Rahman, & Andayani, 2017;Song, 2015;Song, Thomas, & Yi, 2010;Hassan, Percy, & Stewart, 2006).…”

Section: Introductionmentioning

confidence: 94%

“…The results are consistent with (Cotter & Zimmer, 2003) that upward fixed assets revaluation has a higher value relevance. Fathmaningrum and Yudhanto (2019) and Pascayanti et al (2017) provide evidence from Indonesia. Fathmaningrum and Yudhanto (2019) examine market reaction on fixed assets revaluation of manufacturing companies in Indonesia for the period 2015-2016.…”

Section: Value Relevance Of Upward Assets Revaluation Disclosurementioning

confidence: 99%

“…Fathmaningrum and Yudhanto (2019) and Pascayanti et al (2017) provide evidence from Indonesia. Fathmaningrum and Yudhanto (2019) examine market reaction on fixed assets revaluation of manufacturing companies in Indonesia for the period 2015-2016. However, they do not mention specifically upward assets revaluation or downward assets revaluation.…”

Section: Value Relevance Of Upward Assets Revaluation Disclosurementioning

confidence: 99%

“…To support Fathmaningrum and Yudhanto (2019), whether asset revaluation information value relevance or not for the period 2012-2018 in Indonesia, this study combines the non-asset revaluation firms and asset revaluation firms by using a dummy variable. 1 for assets revaluation information from assets revaluation firms and 0 for otherwise.…”

Section: Additional Analysismentioning

confidence: 99%

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Value Relevance of Asset Revaluation Disclosure

Diantimala

Sofyani

2020

JAI

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Research aims:The paper aims to examine the value relevance of asset revaluation disclosure after seven years of implementation of international accounting standards (IAS). This paper highlights the implementation of SFAS 16 which is converged to IAS 16 regarding fixed assets. The SFAS 16 requires companies to disclose the value of fixed assets according to market values if the book value is significantly different from the market value. Design/Methodology/Approach: We analyze 46 non-financial companies that employ the revaluation model during 2012-2018. As benchmarks, we randomly collect 46 non-financial companies that d0 not revaluate their assets during the period. To investigate the value relevance of upward asset revaluation disclosure, we approximate the relationship between and the effect of upward asset revaluation disclosure and stock price by employing Ohlson modified model (1995). Research findings: We suggest that disclosure of upward asset revaluation is value-relevant. The SFAS 16 states that an upward asset revaluation increases the value of equity and assets. Furthermore, we suggest that the information of the book value of equity, net income, and earnings of asset revaluation firms is valuerelevant. The results show that the information of the book value of equity and earnings are more value-relevant than upward asset revaluation disclosure and net income. Theoretical contribution/Originality: Our study contributes to filling the gap of previous results related to the value relevance of fair value disclosure of fixed assets. Practitioner/Policy implication: This research gives an input for financial accounting standards development in Indonesia, particularly regarding the issue of asset revaluation. Research limitation/Implication: Only 46 non-financial companies that employ the revaluation model during 2012-2018. Thus, our study has a small sample size.

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Section: Resultssupporting

confidence: 63%

Section: Introductionmentioning

confidence: 94%

Section: Value Relevance Of Upward Assets Revaluation Disclosurementioning

confidence: 99%

Section: Value Relevance Of Upward Assets Revaluation Disclosurementioning

confidence: 99%

Section: Additional Analysismentioning

confidence: 99%

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Value Relevance of Asset Revaluation Disclosure

Diantimala

Sofyani

2020

JAI

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Faktor-Faktor yang Memengaruhi Revaluasi Aset Tetap pada Perusahaan Manufaktur

Livia

Sufiyati

2022

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The purpose of this study is to determine the effect of company’s growth, fixed asset intensity, company size, operating cash flow, and leverage to fixed asset revaluation in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period of 2018-2020. This study tested the classical assumption, namely the multicollinearity test before testing the hypothesis using logistic regression analysis techniques. This study used 444 data obtained from 148 manufacturing companies that have met the established criteria. The data then inputted and calculated using Microsoft Excel and processed using the SPSS version 24 program. The results of this study indicate that company growth and operating cash flow have no significant effect and positive effect on fixed assets revaluation, fixed asset intensity has a significant and positive effect on fixed assets revaluation, and firm size and leverage have no significant and negative effect on fixed assets revaluation.

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Does Accounting Information Become Pertinent to Asset Revaluation Decision?

Teruni¹,

Qadri

Putra³

et al. 2022

JAP

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ABSTRACTThis research aims to examine whether accounting information proxied by fixed asset intensity, financial leverage, and liquidity affect fixed asset revaluation decisions in the manufacturing sector in Indonesia. The study used the purposive sampling method with 80 firm-year observations derived from 20 chosen companies using logistic regression and generalized effect estimation analysis with panel data. The pooled data found a positive association between fixed asset intensity and fixed asset revaluation, a positive association between financial leverage and fixed asset revaluation, and a negative relationship between liquidity and fixed asset revaluation. This study found that public firms revaluing their fixed asset can provide more relevant accounting information for users of financial statements. The research implies that fixed asset revaluation improves a firm's borrowing capacity and capital structure.ABSTRAKPenelitian ini bertujuan untuk menganalisis apakah informasi akuntansi yang diukur melalui intensitas perolehan aset tetap, leverage, dan likuiditas akan mempengaruhi keputusan revaluasi aset tetap pada perusahaan sektor manufaktur di Indonesia. Penelitian ini menggunakan metode purposive sampling untuk mengumpulkan data dari 80 perusahaan-tahun yang dianalisis melalui regresi logistik data panel dan regresi efek rerata populasi. Hasil penelitian ini menunjukkan bahwa intensitas pembelian aset tetap dan financial leverage berpengaruh positif signifikan terhadap keputusan revaluasi aset, sedangkan likuiditas berpengaruh negatif terhadap keputusan revaluasi tersebut. Selain itu, diperoleh kesimpulan bahwa emiten yang merevaluasi aset tetapnya akan meningkatkan kualitas informasi akuntansi yang bermanfaat bagi pengguna laporan keuangan. Implikasi dari penelitian ini adalah perusahaan yang melakukan revaluasi aset tetap akan meningkatkan kapasitas struktur permodalannya.

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Determinants of Fixed Asset Revaluation Decision and Its Impacts on Market Reaction: A Comparative Study in Indonesia and Singapore

Cited by 4 publications

References 0 publications

Value Relevance of Asset Revaluation Disclosure

Value Relevance of Asset Revaluation Disclosure

Faktor-Faktor yang Memengaruhi Revaluasi Aset Tetap pada Perusahaan Manufaktur

Does Accounting Information Become Pertinent to Asset Revaluation Decision?

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