Abstract
The research is aimed to analyze the influence of debt covenant, political cost and implementation of IFRS toward firm value. The population in this research are non public companies in the period 2016, 2017 and 2018. Non public companies are used as the population in this research to see the level of implementation of IFRS that have been applied by non public companies. The sample selection by using a random method and obtaining a sample of 46 companies or 138 observation data. The analysis used in this research is a Panel Data Regression by using Eviews 10.00. The partial result showed that political cost and implementation of IFRS affect firm value, while the debt covenant does not affect firm value. And the simultaneous result showed that debt covenant, political cost and implementation of IFRS affect firm value.
Highlights
Gojek's valuation is greater because business analysis in the digital era has changed, where assets are no longer tangible like those of Garuda Indonesia, but there are intangible assets that cannot be guaranteed by banks but are attached to the company, such as skills, innovations, ideas and so on
The Implementation of International Financial Reporting Standard (IFRS) is measured by the percentage of the number of points in accordance with the company's financial statements compared to the total points, as follows: IFRS = 2N4 x where, N is the number of points obtained per company with value range per question is 0-1 of 24 questions
The result of statistical testing shows the debt covenant (LV) variable has a coefficient value of -0.001519 with a probability value of 0.0734 > 0.05, which means that the debt covenant variable has no effect towards the Company value
Summary
The company was founded with the aim of seeking maximum profit. Apart from looking for profit, the company tries to increase the company value. As for the things that cause Gojek's valuation to be 14 times greater than Garuda Indonesia's market capitalization, some investors have injected funds into Gojek so that it can hold the status of decacorn. Gojek's valuation is greater because business analysis in the digital era has changed, where assets are no longer tangible like those of Garuda Indonesia, but there are intangible assets that cannot be guaranteed by banks but are attached to the company, such as skills, innovations, ideas and so on (kompas.com). The politicalcost hypothesis states that large companies can be in the public spotlight where they will choose an accounting method that moves the current year's profit to the year in order to minimize political costs. The implementation of IFRS in accounting policies in companies can affect company profits and attract the attention of investors in investing in the company so that the company value will increase. This research was conducted to see the effect of debt covenants, political costs and IFRS implementation towards firm value
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