The Determinants of the Revaluation Model of Long-lived Assets

• Main Authors: Chou, Weichun, 周韋均
• Other Authors: CHEN, Weitzu
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/56136869528477643196

碩士 === 國立臺北大學 === 會計學系 === 100 === To enhance the international competitiveness of domestic firms, Financial Supervisory Commission in Taiwan has officially decided to adopt the International Financial Reporting Standards (IFRS) since 2013. However, accounting for long-lived assets still maintains the cost model due to the concern on the reliability of financial reporting by the revaluation model. Thus, this study investigates the determinants of accounting for long-lived assets under the revaluation model by listed British firms adopting IFRS since 2005. A total sample of 2,179 observations based on British firms over the period of 2005-2010 is yielded by this study. By separating the determinants of whether or not to adopt the revaluation model into economic and reporting factors, this study employs the Logistic model to investigate the driving forces behind the adopting decision. Empirical results suggest that for economic factors, measured by national, inter-industry, and firm-specific operating proxies, most factors including absolute changes in sales (A△SALES), absolute changes in operating income (A△OI), and absolute changes in operating cash flows (A△OCF) are negatively correlated with the use of the revaluation model. It implies that firm intends to use the cost model by reducing the volatility of earnings forecast. For reporting factors, the decision of using the revaluation model is positively and negatively related with ratio of debt to total assets (DE) and the extent of information asymmetry (MVB), suggesting accounting policy of long-lived assets is employed for contracting purposes. However, positive coefficient on firm size (SIZE) implies that the larger the firms, the more likely they use the revaluation model to reveal the fair value of their assets.