Revaluation Decisions Research Articles

Determining Factors in The Decision of Fixed Assets Revaluation

This study aims to analyze the determinants of fixed asset revaluation decisions. This study uses data from financial reports and annual reports of manufacturing companies in the industrial sector on the Indonesia Stock Exchange for 2018-2022. The entire sample consists of 24 companies over five years (2018-2022). The analytical method in this study uses descriptive statistics and binary logistic regression. Based on the research results, it can be concluded that only fixed asset intensity affects fixed asset revaluation, while the leverage and liquidity variables do not affect fixed asset revaluation.

Revaluation Asset Determinants toward Company’s Value

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.

EVIDENCE FROM SOUTH AFRICAN CONSTRUCTION AND INDUSTRIAL TRANSPORTATION BUSINESSES ON ASSET REVALUATION

This study examines the relationship between asset revaluation and accounting and economic factors among firms listed on the Johannesburg Stock Exchange (JSE). It employs a quantitative model using seven explanatory variables, namely, leverage, operating cash flow, firm size, return on equity, return on assets, Tobin’s q, and common share ownership. The study covers South African companies listed on the Johannesburg Stock Exchange (JSE) that applied asset revaluation at least once during the period 2006 to 2017. The findings of the study reveal that: (1) leverage does not have a significant impact on the revaluation decisions of the sampled firms, (2) macro-economic policy environment could significantly influence revaluation decisions, (3) the size of firms is one of the most important factors that have a significant effect on firm performance, (4) leverage has a significant impact on firm performance, while the other variables show a negative or inverse relationship with the revalued asset. The results of this study will fill a gap in understanding the variables identified by this research study which has justified with most relevant literature that motivates management of South African firms to choose the revaluation model to measure fixed assets. This study contributes to the current body of knowledge and further offers insight into the effect of the revaluation of fixed assets on firm performance, the characteristics of firms that revalue their fixed assets, and whether or not fixed asset revaluation decisions are influenced by the firm’s leverage. This study has also provided a very robust plan for future researchers.

PENGARUH LEVERAGE, PENURUNAN ARUS KAS OPERASI, FIXEDASSET INTENSITY, DAN PERTUMBUHAN PERUSAHAAN TERHADAP KEPUTUSAN REVALUASI ASET TETAP

This study aims to examine the effect of leverage, decreased operating cash flow, fixed asset intensity, and company growth on fixed asset revaluation decisions in chemical sub-sector companies listed on 5 ASEAN exchanges in 2017-2019. The data used in this research is secondary data that comes from the financial reports of each stock exchange. The number of samples in this study were 135 observations using purposive sampling technique. Data is accessed through the website www.idx.co.id, www.bursamalaysia.com, www.sgx.com, www.edge.pse.com.ph, and www.set.or.th. Methods of data analysis in this study using logistic regression analysis method. The results showed that fixed asset intensity had a positive and significant effect on fixed asset revaluation decisions, while leverage, decreased operating cash flow, and company growth had no effect on fixed asset revaluation decisions.

Faktor-faktor yang Mempengaruhi Keputusan Merevaluasi Aset Tetap

This study aims to determine the effect of leverage, liquidity, fixed asset intensity, and size of the company against the decision to revaluate fixed assets. The research was conducted at a manufacturing company listed on the Indonesia Stock Exchange in 2012 until 2016 as many as 550 units of analysis and the sample is collected by using purposive sampling technique which the samples were chosen selectively. By using logistic regression, the result of this research is fixed asset intensity and firm size have positive effect to revaluation decision. Liquidity and leverage have no effect on the decision to revalue fixed assets. The conclusions of this study are companies that have high fixed assets and companies with a large percentage of sales are more likely to revalue fixed assets.
 

The Revaluation Decision for Fixed Assets After the Covid-19 Crisis: The Italian Case

The Revaluation Decision for Fixed Assets After the Covid-19 Crisis: The Italian Case

The background of board, compensation, leverage, and fixed asset revaluation decision

This research aims to obtain empirical evidence in Indonesia whether it is true that companies with boards of commissioners and directors with political, accounting, military background, and the amount of compensation received will affect the selection of revaluation methods to measure their fixed assets that revaluation is commonly used to facilitate the company in obtaining additional loan funds and attract investors to invest. This can occur because in the revaluation method, the company's fixed assets are presented under fair conditions. In addition, this study also wants to test whether a company with high debt levels will tend to revalue its fixed assets measured by the leverage of the company. This research used the entire company population in all types of industries listed on the IDX for the period 2016. The final sample used in this research was 458 using logistic regression analysis. In this research, it is found that political background and accounting background has no positive effect, military background had positive effect, and compensation and leverage had no negative effect on the asset revaluation decision remains. JEL Classification: M48, D72, G32 DOI: https://doi.org/10.26905/jkdp.v24i3.4220

PENGARUH LEVERAGE, MARKET-TO-BOOK RATIO, LIKUIDITAS DAN INTENSITAS ASET TETAP TERHADAP KEPUTUSAN REVALUASI ASET TETAP

Revaluation of fixed assets is one of the reports that must be published by the company in its financial statements. The regulations of their publications are set out in PSAK 16 in which, fixed assets are stated. These information need by investors that must be fulfilled by the companies. Revaluation of asset is considered as relevant information of investors such as on-time information, and fit with information that needs by investors. The purpose of this research is to analyze and examine leverage, market to book ratio, liquidity, and fixed assets intensity that could be affected by fixed asset revaluation decisions. The sample of this research is manufacturing companies listed on the BEI in 2015-2016. This research uses purposive sampling as a sampling method. The regression that used in this research is logistic regression by using quantitative hypothesis. All Financial statement which published is data in this research. The result of this research which variables as, the liquidity, and intensity of fixed assets of the company have no effect on the fixed asset revaluation decisions.

PENGARUH KONTRAK UTANG, BIAYA POLITIK, DAN ASIMETRI INFORMASI TERHADAP KEPUTUSAN REVALUASI ASET TETAP

The revaluation model had been regulated in PSAK Number 16 and is believed to be more relevant as it presents the asset value according to its true value so it is expected to generate a market response due to an increase in asset value. Therefore this research aims to examine and analyze the effect of debt contracts, political costs, and information asymmetry on fixed asset revaluation decisions. Additional tests were conducted to analyze differences in market responses of firms that revalued fixed assets and did not revalue fixed assets. The research design is based on quantitative research using hypothesis and used quantitative data in the form of financial statements, announcement date of financial statements, closing prices, and Indonesia Composite Index. The research object is all manufacturing companies listed on the IDX in 2012-2016. Data analysis technique for the main model is logistic regression and data analysis technique for the additional test is the Mann-Whitney U test. The result of the research indicates that debt contract has no effect on fixed asset revaluation, political costs have a positive effect on fixed asset revaluation, and information asymmetry has a negative effect on fixed asset revaluation. The additional test proves that there is no difference in the market response of the company that did the revaluation and did not revalue because the increase in asset value was not due to the increase in performance so that the revaluation of the fixed asset is not considered as useful information.

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

The purpose of this study is to examine the influence of firm size, fixed asset intensity, liquidity, leverage, declining cash flow from the operation, and its impact on market reaction. The population in this study is manufacturing companies in Indonesia and Singapore in 2015-2016 period. The sample in this research was taken using a purposive sampling method, a total of 228 manufacturing companies in Indonesia and 255 in Singapore were used as the sample. The data were analyzed using logistic regression and simple linear regression. The results showed that firm size, fixed asset, and leverage affected revaluation policy in Indonesia, while liquidity and declining cash flow from operation did not affect fixed asset revaluation policy in Indonesia. In contrast to what occurred in Singapore, the results showed that fixed asset intensity and leverage proved to affect fixed assets revaluation policy, and firm size, liquidity, and declining cash flow from operation variables did not affect the policy of fixed asset revaluation in Singapore. In addition, this study also found the effect of fixed asset revaluation on market reaction in Indonesia and Singapore. Finally, the study also found differences in the adoption of fixed asset revaluation policies in Indonesia and Singapore.

Motives for Reporting Fixed Assets at Revalued Amount: Evidence from a Developing Economy

The purpose of this study is to examine firms’ motives for reporting fixed assets at revalued amount. The study analysed 30 manufacturing firms listed in Colombo Stock Exchange (CSE) for a period of two years from 2012 to 2013, employing Mann–Whitney U test and bivariate and multivariate logistic regression. It is found that manufacturing firms tend to report their property, plant and equipment (PP&E) at revalued amount, when land and building dominates their fixed assets, and firms whose PP&E is dominated by plant and machinery are inclined towards reporting fixed assets at historical cost. However, all such other factors investigated as firm size, carrying amount of PP&E ( ppe), intensity of PP&E ( ippe), returns on total assets ( roa) and return on equity ( roe) fail to explain the accounting choice between cost and revaluation models. The probability for a revaluation to occur, on the other hand, is found to be significantly and positively associated to financial leverage, indicating that highly levered manufacturing firms tend to revalue their assets, may be with the expectation of creating possibilities for additional borrowing. Further, no other variables investigated associate with the probability for a revaluation to occur, though prior researches support such association. Findings reveal that fixed assets revaluation motives may be characterized by the nature of fixed assets and their market dynamics characterized by the nature of economy in which firms operate. Findings also suggest that fair value accounting is relevant to manufacturers with high levels of land and building within their asset structure. Fixed assets revaluation motives may differ across countries which should accordingly be valued by financial analyst and investors. Future research should focus on value relevance of revaluation decision of firms in developing countries. Revaluation decisions should be analysed as first-time revaluation and frequency of subsequent revaluations. This is the first study in Sri Lanka reporting the evidence for fixed asset revaluation motives.

Surprise from the Central Bank: A Model to Understand Currency Revaluation Decisions

Are countries chronically resisting revaluations vulnerable to speculative attacks? I study the timing of a Central Bank's decision to optimally abandon a currency peg in order to avoid accumulating excessive foreign currency reserves on its balance sheet. The central assumption is that foreign reserves are risky and an excessive amount of them hurts a Central Bank. But abandoning the peg causes the currency to appreciate, which in turn results in a negative output shock that increases with the size of the appreciation. I show that after taking both costs into account, a Central Bank would avoid predictable speculative attacks by introducing uncertainty to the market and announcing its unpegging decision as a surprise. This randomized strategy would lead to a prolonged period of increased speculation against the peg. This model shows that Swiss National Bank's surprise move to unpeg its currency in January of 2015 is consistent with a rational and optimizing Central Bank.

Mechanisms of corporate governance and fixed asset revaluation

This study investigates the relation between the mechanisms of corporate governance and the fixed-asset revaluation decision in the Tunisian context. We also test the impact of firm size, listing status, previous accumulated losses and leverage (control variables) on the choice of whether to revalue assets. Based on a sample of 91 listed and non-listed firms, logistic regression shows that revaluation decision increases with the proportion of shares held in blocks by institutional investors. In addition, we report clear evidence that firms with previous accumulated losses and highly leveraged firms, which are close to and want to avoid default on their debt covenants, are more likely to revalue assets. These findings suggest that revaluation is used as a tool to improve creditors’ perception of the financial health of the firm and thereby improve the firm’s borrowing capacity.

Impact Of Chinas Yuan Revaluation

In the past two years, the Bush Administration, members of Congress and a few senators, such as Sen. Charles Schumer of New York and Sen. Lindsey Graham of South Carolina and others have put pressure on China to abandon her peg the Chinese Yuan to the U.S. Dollar. These efforts finally succeed. On July 21, 2005, Peoples Bank of China announced that the Chinese Yuan is no long pegged solely to the U.S. dollar, instead, the Yuan is now linked to a basket of currencies, including Dollar, the Euro, the Japanese Yen, the Korean Won and other currency from any country that had at least $10 billion trade with China. In this paper we ask the questions: what is the impact of China Yuan revaluation decision? Does this means that China no long stockpile U.S. Treasury Bills? The American consumers can no longer benefit from the low-priced consumer goods manufactured in China? And in what way the U.S. economy will be affected, if at all?

Do fair value adjustments influence dividend policy?

We examine the impact of positive fair value adjustments on dividend policy. If fair value adjustments are transitory in nature and managers are able to assess their implications for future earnings, fair value adjustments in net income is expected to have no distribution consequences. However, positive fair value adjustments may lead to higher dividends when management incorrectly assesses their persistence. This can have a procyclical impact because higher dividends increase leverage, and thus risk. We use a Russian setting that mandates fair value accounting for financial instruments and requires disclosure of unrealised fair value adjustments in income. We find no empirical support for the concern that dividends increase in response to positive fair value adjustments. Rather, there is a negative relationship between positive fair value adjustments and dividend changes, which holds after controlling for dividend policy determinants and any endogenous nature of the revaluation decision. We discuss several possible explanations for this finding.