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2018•Unpublished venueRequires access

The Effect of Leverage and Firm Size to Assets Revaluation Decesion

Triandi Triandi, Arief Fahmie

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Abstract

Abstract. Assets are resources that are controlled by a company as a result of past eventsand from which future economic benefits are expected to be obtained by the company. Ingeneral, assets are divided into 2 groups, namely current assets and non-current assets.Current assets are assets that can be converted into cash in one operating cycle of thecompany or a maximum of 12 (twelve) months. While non-current assets are assets otherthan those classified as current assets. Non-current assets include fixed assets, intangibleassets and long-term financial assets. The reporting of non-current assets in the statementof financial position according to the International Financial Reporting Standard (IFRS) ispresented at fair value. On October 15, the Minister of Finance of the Republic ofIndonesia released the Minister of Finance Regulation (PMK) No. 191 / PMK.010 / 2015concerning Reassessment of Fixed Assets for Taxation Purposes for Requests Proposed in2015 and 2016. Based on these two matters, many public companies should conduct assetrevaluation, especially in 2015 and 2016. This is due to this year the government providedincentives in the form of a reduction in the final income tax rate on the revaluation of fixedassets.This study aims to determine internal factors that influence the company's decision torevaluate assets. The dependent variable studied is the decision of the company to do arevaluation or not. The dependent variable is proxied by the dummy variable, which is therevaluation of assets given a score of 1, while those who do not do a revaluation are given ascore of 0. The independent variables in this study are Leverage and Firm Size. Logisticregression analysis was chosen to analyze whether leverage and firm size have an influenceon the company's decision to revaluate assets. This research is expected to contribute tofactors that influence the company's decision to revaluate assets. Keywords : revaluation, non current assets, leverage, firm size

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What this paper is about

Abstract. Assets are resources that are controlled by a company as a result of past eventsand from which future economic benefits are expected to be obtained by the company. Ingeneral, assets are divided into 2 groups, namely current assets and non-current assets.Current assets are assets that can be converted into cash in one operating cycle of thecompany or a maximum of 12 (twelve) months. While non-current assets are assets otherthan those classified as current assets. Non-current assets include fixed assets, intangibleassets and long-term financial assets. The reporting of non-current assets in the statementof financial position according to the International Financial Reporting Standard (IFRS) ispresented at fair value. On October 15, the Minister of Finance of the Republic ofIndonesia released the Minister of Finance Regulation (PMK) No. 191 / PMK.010 / 2015concerning Reassessment of Fixed Assets for Taxation Purposes for Requests Proposed in2015 and 2016. Based on these two matters, many public companies should conduct assetrevaluation, especially in 2015 and 2016. This is due to this year the government providedincentives in the form of a reduction in the final income tax rate on the revaluation of fixedassets.This study aims to determine internal factors that influence the company's decision torevaluate assets. The dependent variable studied is the decision of the company to do arevaluation or not. The dependent variable is proxied by the dummy variable, which is therevaluation of assets given a score of 1, while those who do not do a revaluation are given ascore of 0. The independent variables in this study are Leverage and Firm Size. Logisticregression analysis was chosen to analyze whether leverage and firm size have an influenceon the company's decision to revaluate assets. This research is expected to contribute tofactors that influence the company's decision to revaluate assets. Keywords : revaluation, non current assets, leverage, firm size

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Available abstract

Abstract. Assets are resources that are controlled by a company as a result of past eventsand from which future economic benefits are expected to be obtained by the company. Ingeneral, assets are divided into 2 groups, namely current assets and non-current assets.Current assets are assets that can be converted into cash in one operating cycle of thecompany or a maximum of 12 (twelve) months. While non-current assets are assets otherthan those classified as current assets. Non-current assets include fixed assets, intangibleassets and long-term financial assets. The reporting of non-current assets in the statementof financial position according to the International Financial Reporting Standard (IFRS) ispresented at fair value. On October 15, the Minister of Finance of the Republic ofIndonesia released the Minister of Finance Regulation (PMK) No. 191 / PMK.010 / 2015concerning Reassessment of Fixed Assets for Taxation Purposes for Requests Proposed in2015 and 2016. Based on these two matters, many public companies should conduct assetrevaluation, especially in 2015 and 2016. This is due to this year the government providedincentives in the form of a reduction in the final income tax rate on the revaluation of fixedassets.This study aims to determine internal factors that influence the company's decision torevaluate assets. The dependent variable studied is the decision of the company to do arevaluation or not. The dependent variable is proxied by the dummy variable, which is therevaluation of assets given a score of 1, while those who do not do a revaluation are given ascore of 0. The independent variables in this study are Leverage and Firm Size. Logisticregression analysis was chosen to analyze whether leverage and firm size have an influenceon the company's decision to revaluate assets. This research is expected to contribute tofactors that influence the company's decision to revaluate assets. Keywords : revaluation, non current assets, leverage, firm size

Key concepts: Fixed asset, Assets under management, Current asset, Weighted average return on assets, Return on assets, Working capital, Leverage (statistics), Book value

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