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Could Fixed Asset Revaluation Encourage Investment? Study Case in Indonesia

Author

Listed:
  • Irma Sari Permata

    (Faculty of Economics and Business, Universitas Pancasila, Indonesia)

  • Gunawan Baharuddin

    (Faculty of Economics and Business, Universitas Pancasila, Indonesia)

Abstract

After the COVID-19 Global Pandemic, most firms in Indonesia required a significant enough money injection to improve their value and encourage investors to make investments. The research seeks to assess which determinants are most relevant and significant in promoting the value of the company. This study examined 288 samples with three independent variables: liquidity via the quick ratio indicator (QR), ownership structure via the majority ownership indicator, and corporate size via the total asset natural logarithm indicator. Structural Equation modelling is utilized during the analysis stage to determine the strength of the association between independent and dependent variables. The results revealed that liquidity and the size of the firm have an impact on the increase in the company’s value through asset revaluation; however, ownership structure has no impact. The research suggests that companies listed at the EIB should pay special attention to the variables of investment opportunity and size if they want to increase their investments in the future.

Suggested Citation

  • Irma Sari Permata & Gunawan Baharuddin, 2023. "Could Fixed Asset Revaluation Encourage Investment? Study Case in Indonesia," New Challenges in Accounting and Finance, EUROKD, vol. 10, pages 1-13.
    • Handle: RePEc:bco:ncafaa::v:10:y:2023:p:1-13
    DOI: 10.32038/NCAF.2023.10.01
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    References listed on IDEAS

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    1. Nur Triani & Deden Tarmidi, 2019. "Firm Value: Impact of Investment Decisions, Funding Decisions and Dividend Policies," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(2), pages 158-163, April.
    2. Bradford Cornell & Alan C. Shapiro, 2021. "Corporate stakeholders, corporate valuation and ESG," European Financial Management, European Financial Management Association, vol. 27(2), pages 196-207, March.
    3. Omar Al Farooque & Wonlop Buachoom & Lan Sun, 2020. "Board, audit committee, ownership and financial performance – emerging trends from Thailand," Pacific Accounting Review, Emerald Group Publishing Limited, vol. 32(1), pages 54-81, January.
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