Revaluation Of Assets Research Articles

The Commitment to Income-Decreasing Accounting Choices as a Credible Signal to Reduce Information Asymmetry: The Case of Asset Revaluations

Bagnoli and Watts (2005) propose that a manager could reduce information asymmetry by choosing an income-decreasing accounting choice that signals the firm’s relatively good future prospects. A limitation in testing this theory is that most income-decreasing accounting choices over time reverse such that aggregated earnings would be the same, regardless of the choice. One income-decreasing accounting choice that never reverses is the choice of upward asset revaluation, where the resulting gains are recognized through OCI and reduce future earnings by increasing future depreciation expense. In the UK, prior to FRS15, firms had the option to upwardly revalue on a one-time basis. FRS15, and subsequently IFRS, however, require those firms that upwardly revalue precommit to revalue on a consistent basis. This precommitment sacrifices future reporting discretion, which Bagnoli and Watts (2005) suggest serves as a costly signal of a firm’s relatively good future prospects that reduces information asymmetry. The choice not to upwardly revalue, therefore, serves as a signal of a firm’s relatively poor future prospects and also reduces information asymmetry, but this choice does not require precommitment such that the reduction in information asymmetry would be less than the choice to precommit to upward revaluations. Using a propensity-score matched-pair design on a sample of UK firms to test our predictions during the period requiring precommitment, we find lower forecast dispersion, lower return volatility, and a lower cost of capital for firms that precommit to upward asset revaluations, relative to those firms that choose not to upwardly revalue their operating assets.

Value Relevance of Asset Revaluation Disclosure

: 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 value-relevant. 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

The Effect of Fair Value Adjustments on Dividend Policy Under Mandatory International Financial Reporting Standards Adoption: Australian Evidence

Using a sample of firms from the financial sector of the Australian Securities Exchange, we examine the effect of the fair value adjustments of financial instruments on firms’ dividend distributions in the context of mandatory International Financial Reporting Standards (IFRS) adoption. We find a positive relationship between the fair value adjustments of financial instruments and firms’ dividend payouts, suggesting that the frequent use of fair value adjustments of financial instruments by financial firms following mandatory IFRS adoption has the potential to increase the proportion of transitory earnings in reported earnings and cause changes in dividend policies. Our results add to the ongoing debate on the unintended economic consequences of fair value accounting (FVA) and provide empirical support for regulators’ concerns that unrealized FVA gains from asset revaluation during booms may encourage the distribution of those unrealized gains.

The Impact of Appraisal Quality on the Voluntary Disclosure of Asset Revaluation

AbstractIn the wake of the global financial crisis, we compare Korean firms that voluntarily disclosed their revaluation in a timely manner with those that did not. We find that firms are more likely to disclose revaluation when they hire a large, reputable appraisal firm and when they have a large number of revaluation increments. We observe a significantly positive market reaction to the voluntary disclosure of the revaluation results. A positive market reaction is mainly observed for firms that hired a large, reputable appraisal firm, had a large number of revaluation increments, and were under greater financial distress before revaluation.

Differences in the Financial Performance before and after Revaluation of Fixed Assets

This study aims to determine and test differences in companies' financial performance before and after the revaluation of fixed assets empirically. The data obtained were analyzed using the t-test analysis technique for two related samples (paired-sample t-test). The conclusion of the research results is first, there is no difference in the Debt-to-Equity Ratio, Fixed Assets to Net Worth, and Return on Investment after the implementation of fixed asset revaluation. Before implementing fixed asset revaluation. Second, there is no difference in the company's financial performance before implementing fixed asset revaluation and after the revaluation implementation. These results indicate that while there is an increase in assets' value, the financial performance is not affected. Therefore, the policy for fixed assets revaluation must be implemented carefully. The company must make a strategic decision accompanying the policy so that the assets' revaluation will increase financial performance.

FAKTOR-FAKTOR YANG MEMPENGARUHI REVALUASI ASET TETAP

This study was aimed at examining the influence of factors to fixed assets revaluation in companies listed in Indonesia Stock Exchange. Factors tested in this study is leverage, operating cash flow, firm size, stucture of assets, growth companies, IOS, ownership control, mergers, acquisitions and fixed assets revaluation. The sample in this study was determined by using purposive sampling method in order to obtain 84 sample companies with 168 observations. The data analysis used logistic regression analysis. The result of this study indicated that the variable leverage, operating cash flow, firm size, stucture of assets, growth companies, ownership control did not have effect to fixed assets revaluation, while variable mergers and acquisitions affected fixed assets revaluation.

The risk of policy tipping and stranded carbon assets

If global warming is to stay below 2 °C, there are four risks of assets stranding. First, substantial fossil fuel reserves will be stranded at the end of the fossil era. Second, this is true for exploration capital too. Third, unanticipated changes in present or expected climate policy cause discrete jumps in today's valuation of physical and natural capital. Fourth, if timing and intensity of climate policy are uncertain, revaluation of assets occurs as uncertainty about future climate policy is resolved. To highlight these four effects, we use an analytical model of investment in exploration capital with intertemporal adjustment costs, reserves depletion and market capitalization, and calibrate it to the global oil and gas industry. Climate policy implements a carbon budget commensurate with 2 °C peak warming and we allow for immediate or delayed carbon taxes and renewable subsidies. The social welfare ranking of these instruments is inverse to that of the oil and gas industry which prefers renewable subsidy and delaying taxes for as long as possible. We also pay attention to how the legislative “risk” of tipping into policy action affects the timing of the end of the fossil era, the profitability of existing capital, and green paradox effects.

Kinerja Keuangan Dan Penghematan Pajak Sebelum Dan Sesudah Revaluasi Aset

Revaluation of assets is considered capable of fulfilling relevant information to investors and can improve the company's financial performance. In addition to improving financial performance, there are other studies that mention the revaluation of fixed assets may cause tax savings. Researches mostly discusse the impact of revaluation of fixed assets related to financial performance using quantitative methods, while researches looking at taxation aspects are discussed with qualitative methods. Therefore the researcher will try to connect financial performance using variables in the form of debt to equity ratio, operational profit margin, total turnover assets, and return on assets and tax savings using effective tax rate before and after revaluing fixed assets. The variable was tested using a mean difference test-MANOVA method and the sample used was a public company that revalued its fixed assets in 2013 year. The results of the study did not prove that there were differences in financial performance and tax savings before and after the company revaluing fixed assets. This has no effect because the company that revalues ​​fixed assets is merely to meet the target of the government or actually the impact of the tax changes does not have a significant influence because there may be other impacts such as new additional costs for example appraiser fees, increased depreciation costs, all of which may make the company’s profits declined and final tax must be paid by the company. Instead, the revaluation just increase the book value of fixed assets and not the fixed assets physically

Does Fixed Asset Revaluation Build Trust between Management and Investors?

In this paper, we examine whether fixed asset revaluation has an impact on the timeliness and relevance of information disclosed in financial reporting. Using firms listed in the Korea Stock Exchange market during 2007–2017, this study investigates the change in transparency of the information disclosure environment as proxied by stock price crash risk. We find that, on average, fixed asset revaluation has a positive effect on sustainability by improving timeliness and relevance of disclosed information, thereby decreasing stock price crash risk. In contrast, firms with unhealthy financial conditions and a high degree of information asymmetry show an increase in crash likelihood after fixed asset revaluation. These findings suggest that the relationship between fixed asset revaluation and stock price cash risk is dependent upon management’s motivation for honesty during the revaluation process.

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.

ВИЗНАННЯ ТА ОЦІНКА ОСНОВНИХ ЗАСОБІВ: РЕАЛІЇ СЬОГОДЕННЯ

ВИЗНАННЯ ТА ОЦІНКА ОСНОВНИХ ЗАСОБІВ: РЕАЛІЇ СЬОГОДЕННЯ

The Risk of Policy Tipping and Stranded Carbon Assets

If global warming is to stay below 2°C, there are four risks of assets stranding. First, substantial fossil fuel reserves will be stranded at the end of the fossil era. Second, this will be true for exploration capital too. Third, unanticipated changes in present or expected future climate policy cause instantaneous discrete jumps in today’s valuation of physical and natural capital. Fourth, if timing and intensity of climate policy are uncertain, revaluation of assets occurs as uncertainty about future climate policy is resolved. E.g. abandoning climate policy plans immediately boosts scarcity rent, market capitalization, exploration investment and discoveries. To explain and quantify these four effects, we use an analytical model of investment in exploration capital with intertemporal adjustment costs, depletion of reserves and market capitalization, and calibrate it to the global oil and gas industry. Climate policy implements a carbon budget commensurate with 2°C peak warming and we allow for different instruments: immediate or delayed carbon taxes and renewable subsidies. The social welfare ranking of these instruments is inverse to that of the oil and gas industry which prefers renewable subsidy and delaying taxes for as long as possible. We also pay attention to how the legislative “risk” of tipping into policy action affects the timing of the end of the fossil era, the profitability of existing capital, and green paradox effects.

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.

STUDYING THE COMPONENTS OF THE BANK'S FINANCIAL MANAGEMENT SYSTEM: A CATEGORICAL AND STRUCTURAL ANALYSIS OF THE OBJECTIVE FIELD OF FINANCIAL MANAGEMENT OF THE BANK

The approaches to understanding of the concept of "bank finances" are considered in the article The financial resources as a material representation of the bank's finances, which are part of the bank's resources, are created through the mobilization of funds of economic entities through borrowing, transformed by amounts, terms and risks in accordance with the parameters of placement in the bank's assets by their adaptation, and equity (made by shareholders, created as a result of activities and accumulated as a result of the revaluation of assets), the usage of them in the future may lead to an increase of economic benefits of the bank .The links between the key properties of financial resources and the fundamental postulates of financial management of the bank are considered. The activity of the bank as a financial intermediary and a business entity was characterized.A detailed analysis of the external and internal economic relations in the sphere of the bank's finances has been carried out in terms of the formation of bank management mechanisms. To the internal totality of economic relations in the field of bank finances were determined the shareholders of the bank, the bank staff, elements of the financial structure of the bank and elements of the structure of the banking group, financial and industrial group. It was determined that external economic relations are formed due to business partners, subjects of state regulation, subjects of banking regulation and supervision, clients, etc. The possible influence of external and internal economic relations on the achievement of the objectives of strategic financial management, providing the desired level of competitiveness and financial stability is considered.An important element of the financial performance of the bank is the consideration of their principles. It is determined that the principles of finance of the bank should be divided into general (economic independence, self-financing, material interest and responsibility) and specific (increase transparency of financial performance, self-regulation, provision of financial reserves). As a result of this research, the definition of the concept of "bank finances" has been improved and an object field of financial management of the bank has been formed.

Analysis of Financial and Non Financial Factors to Revaluation of Fixed Asset

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Are Regulatory Measures Influencing Bank Performances: The Ethiopian Case

The study has explored the impact of selected regulatory variables on performances applying a panel regression on 18 commercial banks in Ethiopia for the period 1999-2015. The variables used in the model are directly derived from the extant regulatory approach used by the Central Bank to regulate the banking business. The literature review also shows that most of them are enacted in other countries with few exceptions and mainly related to bill purchase requirements. The model constructed, therefore, has established and finds a statistically significant relationship in some of the regulatory variables with performance measures. The most important findings of this study relate to the negative affect of some of the recent policy directions from the regulator on performances. For instance, branch growth and bill purchases have a statistically significant negative relationship with bank performances. This should be one of the areas requiring policy flexing from the regulatory side in the future. Nevertheless, other policy direction such as capital growth requirement remains a positive contributor to performances. More specifically, the study finds that exchange rate has a positive and statistically significant relationship with the profit models. Despite the benefit of a depreciating local currency and a stable foreign currency type to shield them from currency fluctuation, it allowed banks to earn a policy profit. The depreciation of Birr permitted banks to enjoy a profit from their foreign currency holdings in the form of daily asset revaluations. Nevertheless, many of the variables (prudential regulatory variables) used in this study (interest rate, reserve rate, number of new entrant banks, and level of entry capital) are not statistically significant to influence on bank performances.

The Impact of Assets Revaluation on Banking Capital Adequacy Ratio

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Factors That Infl uence the Revaluation of Fixed Assets in Manufacturing Sector Companies Listed on the Indonesia Stock Exchange Period 2014-2017

This study aims to determine the effect of leverage, liquidity, fi xed assets intensity, and fi rm size on the revaluation of fi xed assets. The population of this study is manufacturing sector companies in Indonesia. The research samples are manufacturing companies listed on the Indonesia Stock Exchange in 2014 - 2017. Sampling technique is conducted using purposive sampling method. The data used are secondary data. The research data include fi nancial statements of manufacturing companies listed on the Indonesia Stock Exchange (IDX) obtained from ww.idx.co.id in 2014-2017. The data collection strategy in this study is the archive strategy, that is, the data collection derived from existing records or databases. Data analysis is done using logistic regression analysis. The results of this study show that the variables of leverage, liquidity, and fi xed assets intensity have no effect on the company’s decision to carry out fi xed assets revaluation, while the variable of fi rm size has an effect on the company’s decision to carry out fixed assets revaluation.

CURRENCY ASPECTS OF FINANCIAL SECURITY OF THE BANKING SYSTEM OF UKRAINE: REGULATORY PRIORITIES AND TRANSFORMATION OF CONTROL

The article is devoted to the topical subject – the study of currency aspects of the financial security of the banking system of Ukraine, taking into account the threats of liberalization of cross-border capital transfer and currency regulation. The main objectives of the article are studying the main threats to the currency security of the banking system of Ukraine in the context of the transformation of currency control within the liberalization of currency relations. In particular, the study found that currency security is one of the main components of the financial security of the banking system, and exchange rate instability is one of the greatest threats to the effective functioning of Ukrainian banking institutions, taking into account the peculiarities of the national structure of financial assets and liabilities of business entities. As a result, it is found that the deterioration of the exchange rate stability leads to a revaluation of assets, the outflow of foreign currency deposits from banks, which leads to their loss and significant deterioration of financial security, while a decrease in the volume of gold and foreign exchange reserves directly affects the currency security of the state, in particular, and the economic in general. Based on the research results, proposals have been made to improve currency regulation and currency control, namely, amendments to the draft law should be made with regard to the administrative restriction of the dollarization level of deposits and credits, indicating the terms for reducing the dollarization rates of loans and deposits from 50 % to 20–25 %. The mechanism for such reduction in dollarization should be included in the instruments of the National Bank of Ukraine, namely, the norm of mandatory reservation for deposits in foreign currency should be 3–4 times higher than the reserve rate in the national currency, which will make foreign currency deposits "uninteresting" for banks, and therefore will lead to a reduction in the interest rate and, accordingly, reduce the desire to save in foreign currency. By dollarization of loans, the credit risk reservation ratio should also be significantly higher than in the national currency in order to demobilize banks for lending in foreign currency, an exception can only be for those enterprises that carry out foreign economic activity. In addition, lending to individuals for all types of loans in foreign currency should be banned, and the fact of such ban should be clearly spelled out in the Law on Currency. This will prevent the outflow of capital from the state and form a mechanism to reduce the scale of the shadow foreign exchange market as the main threats to the currency and financial security of the banking system of Ukraine.