The Effect of Leverage and Firm Size to Assets Revaluation Decesion

Authors

  • Triandi Triandi Sekolah Tinggi Ilmu Ekonomi Kesatuan
  • Arief Fahmie Sekolah Tinggi Ilmu Ekonomi Kesatuan

Keywords:

revaluation, non current assets, leverage, firm size

Abstract

Abstract. Assets are resources that are controlled by a company as a result of past events
and from which future economic benefits are expected to be obtained by the company. In
general, 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 the
company or a maximum of 12 (twelve) months. While non-current assets are assets other
than those classified as current assets. Non-current assets include fixed assets, intangible
assets and long-term financial assets. The reporting of non-current assets in the statement
of financial position according to the International Financial Reporting Standard (IFRS) is
presented at fair value. On October 15, the Minister of Finance of the Republic of
Indonesia released the Minister of Finance Regulation (PMK) No. 191 / PMK.010 / 2015
concerning Reassessment of Fixed Assets for Taxation Purposes for Requests Proposed in
2015 and 2016. Based on these two matters, many public companies should conduct asset
revaluation, especially in 2015 and 2016. This is due to this year the government provided
incentives in the form of a reduction in the final income tax rate on the revaluation of fixed
assets.
This study aims to determine internal factors that influence the company's decision to
revaluate assets. The dependent variable studied is the decision of the company to do a
revaluation or not. The dependent variable is proxied by the dummy variable, which is the
revaluation of assets given a score of 1, while those who do not do a revaluation are given a
score of 0. The independent variables in this study are Leverage and Firm Size. Logistic
regression analysis was chosen to analyze whether leverage and firm size have an influence
on the company's decision to revaluate assets. This research is expected to contribute to
factors that influence the company's decision to revaluate assets.

Keywords : revaluation, non current assets, leverage, firm size

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Published

2021-06-26