THE INFLUENCE OF BIOLOGICAL ASSET ACCOUNTING POLICIES AND CORPORATE GOVERNANCE PRACTICES ON THE FINANCIAL PERFORMANCE: MODERATING ROLE OF KNOWLEDGE ABOUT RENEWABLE ENERGY

Retno Martanti Endah Lestari,Ida Farida,Wahyudin Zarkasyi

doi:10.32479/ijeep.10240

Abstract

High financial performance is the primary goal of all companies, including agricultural companies. In practice, the impact caused by various problems related to accounting policies of biological assets, principles of good corporate governance, knowledge about renewable energy and size of the company. This study aims to prove empirically whether there is an influence of biological asset accounting policy implications, good corporate governance practices and company size on financial performance along with the moderating role of knowledge about renewable energy in agricultural sector companies. Research data were collected through questionnaire instruments, face-to-face interviews and group discussion forums which were conducted in several places in Indonesia by sampling with non-probability sampling. Data were analyzed using Structural Equation Model (SEM). The results showed that the implications of biological asset accounting policies, good corporate governance practices and company size had positive effects on financial performance and knowledge about renewable energy is playing a moderating role among the links. The plantation and forestry sector which is the unit of analysis is a limitation of this study because the agricultural industry includes not forests and gardens, but livestock and fisheries are also included in those who have biological transformed assets.Keywords: Biological Asset Accounting Policies, Good Corporate Governance, Company Size, Financial Performance, Knowledge about Renewable EnergyJEL Classifications: K32, G30, QDOI: https://doi.org/10.32479/ijeep.10240

Highlights

In 1990-2010, the conflict was the forest sector with 1.065 cases, and 563 cases in plantation sector according to (Forest Watch Indonesia, 2015)
This study develops the following hypothesis: H2: Good corporate governance practices have a positive association with financial performance
A significant positive effect on financial performance; Hypothesis 1 is proven where the implications of biological asset accounting policies on financial performance. This means that the better the company implements its biological asset accounting policy, the better the achievement of its financial performance

Summary

Introduction

In 1990-2010, the conflict was the forest sector with 1.065 cases, and 563 cases in plantation sector according to (Forest Watch Indonesia, 2015). The achievement of financial performance in agricultural sector companies, in this case, is that the forestry sector is very much influenced by the accounting policies of the forest plant assets (Hidayah and Zarkasyi, 2017). Banks and methods of defining biological assets and agricultural products make accurate and transparent valuations and accounting possibilities. It should be noted that in whatever way the value can be defined (depending on the availability or absence of an active market), the method of determining the value must be reflected in the accounting policies developed in accordance with IFRS. The valuation of biological assets and agricultural products with fair value can be adjusted. The recommended method makes evaluating performance results more accurate, transparency of information in financial statements and company efficiency (Herawati, 2014)

Objectives

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Conclusion