Abstract
This study’s objective is twofold. The first is to determine the effect of the investment opportunity set, leverage, and liquidity on fixed asset revaluation decisions. The second objective is to examine the effect of fixed asset revaluation decisions on firm value listed on the Indonesia Stock Exchange. The research method used is a quantitative method with statistical hypothesis testing through multiple linear regression (simultaneous and partial significance tests). The number of samples studied was 110, using panel data from 2016–2019. The results of the first stage of the study show that at the 5% significance level, the investment opportunity set and partial leverage have no effect on the revaluation of fixed assets, but liquidity has a significant negative effect on the revaluation of fixed assets. Meanwhile, the results of the second stage of the study show that the investment opportunity set has no significant effect on firm value, but leverage, liquidity, and fixed asset revaluation partially affect firm value.
Highlights
Fixed assets in the company's development from year to year have a growing influence on the company's value
By making company financial reporting standards comparable, understandable, reliable, and relevant, which was initiated by the International Accounting Standards Board (IASB), an institution that provides a common understanding for business people all over the world, Indonesia's role as a part of the world's business has adapted, with the convergence of IFRS into the Statement of Financial Accounting Standards (PSAK) commencing in 2012
The following theories are offered in this study: H1: There is an influence of investment opportunity set on the revaluation of fixed assets
Summary
Fixed assets in the company's development from year to year have a growing influence on the company's value. The business world uses the same recording standards to determine the fair value of a fixed asset. PSAK was adapted from IFRS in Indonesia on January 1, 2012, so that firms in Indonesia analyze and record assets from historical cost to fair value. This amendment affects the regulation of the financial statements' recognition, recording, reporting, and disclosure of property, plant, and equipment. The revaluation model should be recorded at the revaluation amount, which is the fair value at the revaluation date less accumulated depreciation and accumulated impairment losses after the revaluation date, after recognition as an asset, property, plant, or equipment whose fair value can be measured reliably. Fixed assets play an essential role in the day-to-day operations of a business
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