International Journal of Accounting, Finance and Risk Management

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Analysis of Relationship Revaluation of Property, Plant and Equipment Company on Stock Prices and the Rate of Return on Stock on Indonesian Stock Exchange

Received: Apr. 26, 2017    Accepted: Jun. 22, 2017    Published: Aug. 03, 2017
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Abstract

This study determined the relationship revaluation of property, plant and equipment on stock prices and the rate of return on stock in the manufacturing company. The population included the manufacturing companies included in the index LQ45 in Indonesia Stock Exchange in January 2011 to December 2013. The descriptive method utilized and the data were analyzed using multiple regression. The data were gathered from a yearly financial report in Indonesia stock exchange, data collection, data analysis, statistical analysis. The result of this research has shown that 1) There is the relationship between the financial asset classes of property, plant and equipment at fair value with reliability, 2) Reporting of fixed asset property, plant and equipment at fair value biased and unreliable especially for SE (The difference between the change in value of assets) and PPNINC (the increase of the value of property, plant, equipment company in period t), and 3) The fair value has ability to explain the explanatory power which is quite significant to the stock price, exceeds that can be presented with the historical cost. Based on the result, it can be concluded that asset reporting at fair value did not show a reliable quality. This was due to a difference in reporting an overvalued increase in the value of company asset in certain periods and increase in value property, plant and equipment in certain periods. And the changes in the value of property, plant, and equipment were reported together with the assessment made by investors and had a value of reliability.

DOI 10.11648/j.ijafrm.20170203.13
Published in International Journal of Accounting, Finance and Risk Management ( Volume 2, Issue 3, August 2017 )
Page(s) 107-112
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Revaluation of Property, Plant and Equipment, Rate of Return Stock, Stock Price

References
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[6] Barlev, B., Fried, D., Haddad, J. R. & Livnat, J. (2007). Revaluation of Revaluations: A Cross-Country Examination of the Motives and Effects on Future Performance. Journal of Business Finance and Accounting, 34(7-8), 1025-1050.
[7] Barth, M. E. (2000). ―Valuation-Based Research Implications for Financial Reporting and Opportunities for Future Research. Accounting and Finance, 40: 7—31.
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[9] Bernard, V. L. & Thomas, J. K. (1990). Evidence that Stock Prices Do Not Fully Reflect the Implications of Current Earnings for Future Earnings. Journal of Accounting and Economics, 13(4), 305-34.
[10] Christensen, J. A. & Demski, J. S. (2003). Accounting Theory: An Information Content Perspective.
[11] Dirga, Dinhi, (22 September 2007). Implementation IFRS, between harmonization and Conspiracy. Retrieved http://en.wikipedia.org/wiki/.
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[13] Eccher, E. A., K. Ramesh, and S. R. Thiagarajan. (1996). ―Fair value disclosures by bFank holding companies‖, Journal of Accounting and Economics, Vol. 22, No. 1–3 (Aug.– Dec.): 79–117.
[14] Financial Accounting Standard Board (FASB). (2008, January 25). Statement of Financial Accounting Standard Board. Retrieved from http://www.fsb.org/st.
[15] Hitz, J. M. (2005). ―The Decision Usefulness of Fair Value Accounting-A Theoretical Perspective: Cologne Working Paper on Banking, Corporate Finance, Accounting and Taxation, Retrieved from http://www.wiso.uni-koeln.de.
[16] Jegadeesh, N. & Livnat, J. (2006). Revenue Surprises and Stock Returns. Journal of Accounting and Economics, 41(2), 147-171.
[17] Lobo, G. J. and I. Song. (1989). ―The Incremental Information in SFAS No. 33 Income Disclosures over Historical Cost Income and Its Cash and Accrual Components‖, Accounting Review, Vol. 64, No. 2 (April): 329–43.
[18] Maddala, G. S. (1992). Introduction to Econometrics. New York: Prentice-Hall Inc.
[19] Merton, R. C. (1987). ―A Simple Model of Capital Market Equilibrium with Incomplete Markets. The Journal of Finance, p. 483—510.
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[21] Rivera, M. M. Jr, Rivera, R. V., (1996). Practical Guide to Thesis and Dissertation Writing.
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  • APA Style

    Lenny Leorina Evinita. (2017). Analysis of Relationship Revaluation of Property, Plant and Equipment Company on Stock Prices and the Rate of Return on Stock on Indonesian Stock Exchange. International Journal of Accounting, Finance and Risk Management, 2(3), 107-112. https://doi.org/10.11648/j.ijafrm.20170203.13

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    ACS Style

    Lenny Leorina Evinita. Analysis of Relationship Revaluation of Property, Plant and Equipment Company on Stock Prices and the Rate of Return on Stock on Indonesian Stock Exchange. Int. J. Account. Finance Risk Manag. 2017, 2(3), 107-112. doi: 10.11648/j.ijafrm.20170203.13

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    AMA Style

    Lenny Leorina Evinita. Analysis of Relationship Revaluation of Property, Plant and Equipment Company on Stock Prices and the Rate of Return on Stock on Indonesian Stock Exchange. Int J Account Finance Risk Manag. 2017;2(3):107-112. doi: 10.11648/j.ijafrm.20170203.13

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  • @article{10.11648/j.ijafrm.20170203.13,
      author = {Lenny Leorina Evinita},
      title = {Analysis of Relationship Revaluation of Property, Plant and Equipment Company on Stock Prices and the Rate of Return on Stock on Indonesian Stock Exchange},
      journal = {International Journal of Accounting, Finance and Risk Management},
      volume = {2},
      number = {3},
      pages = {107-112},
      doi = {10.11648/j.ijafrm.20170203.13},
      url = {https://doi.org/10.11648/j.ijafrm.20170203.13},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ijafrm.20170203.13},
      abstract = {This study determined the relationship revaluation of property, plant and equipment on stock prices and the rate of return on stock in the manufacturing company. The population included the manufacturing companies included in the index LQ45 in Indonesia Stock Exchange in January 2011 to December 2013. The descriptive method utilized and the data were analyzed using multiple regression. The data were gathered from a yearly financial report in Indonesia stock exchange, data collection, data analysis, statistical analysis. The result of this research has shown that 1) There is the relationship between the financial asset classes of property, plant and equipment at fair value with reliability, 2) Reporting of fixed asset property, plant and equipment at fair value biased and unreliable especially for SE (The difference between the change in value of assets) and PPNINC (the increase of the value of property, plant, equipment company in period t), and 3) The fair value has ability to explain the explanatory power which is quite significant to the stock price, exceeds that can be presented with the historical cost. Based on the result, it can be concluded that asset reporting at fair value did not show a reliable quality. This was due to a difference in reporting an overvalued increase in the value of company asset in certain periods and increase in value property, plant and equipment in certain periods. And the changes in the value of property, plant, and equipment were reported together with the assessment made by investors and had a value of reliability.},
     year = {2017}
    }
    

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    AU  - Lenny Leorina Evinita
    Y1  - 2017/08/03
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    T2  - International Journal of Accounting, Finance and Risk Management
    JF  - International Journal of Accounting, Finance and Risk Management
    JO  - International Journal of Accounting, Finance and Risk Management
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    EP  - 112
    PB  - Science Publishing Group
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    UR  - https://doi.org/10.11648/j.ijafrm.20170203.13
    AB  - This study determined the relationship revaluation of property, plant and equipment on stock prices and the rate of return on stock in the manufacturing company. The population included the manufacturing companies included in the index LQ45 in Indonesia Stock Exchange in January 2011 to December 2013. The descriptive method utilized and the data were analyzed using multiple regression. The data were gathered from a yearly financial report in Indonesia stock exchange, data collection, data analysis, statistical analysis. The result of this research has shown that 1) There is the relationship between the financial asset classes of property, plant and equipment at fair value with reliability, 2) Reporting of fixed asset property, plant and equipment at fair value biased and unreliable especially for SE (The difference between the change in value of assets) and PPNINC (the increase of the value of property, plant, equipment company in period t), and 3) The fair value has ability to explain the explanatory power which is quite significant to the stock price, exceeds that can be presented with the historical cost. Based on the result, it can be concluded that asset reporting at fair value did not show a reliable quality. This was due to a difference in reporting an overvalued increase in the value of company asset in certain periods and increase in value property, plant and equipment in certain periods. And the changes in the value of property, plant, and equipment were reported together with the assessment made by investors and had a value of reliability.
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    ER  - 

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Author Information
  • Department of Management, Manado State of University, North Sulawesi, Indonesia

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