Title:
MOTIVES FOR FIXED ASSET REVALUATIONS: EMPIRICAL STUDY IN INDONESIA STOCK EXCHANGE

Authors:
Sri Hastuti, Bambang Sutopo, Ari Kuncara Widagdo, Doddy Setiawan, Indonesia

Abstract:

This study examines the motives of fixed asset revaluations. The temporary tax cut policy on fixed asset revaluations in Indonesia occurred in 2015 and 2016. Fixed asset revaluation is restatement of fixed asset value according to current value. The motives in this study include firm size, leverage, loss, tax period, and profitability. This study used a sample of Indonesian listed firms during 2012-2017. The sample used in this study was 2753 firm-years. Based on logistic regression analysis, the results indicate that firms with greater firm size and higher leverage are more likely to perform fixed asset revaluations. Conversely, the results show a negative relationship for the variables including tax period and profitability. If there is a temporary tax cut policy of fixed asset revaluations and the lower the profitability, the more likely it is for them to perform fixed asset revaluations. Additional test results for the non-financial industry are consistent.