The Quality of Fair Revaluation of Fixed Assets and Additional Calculations Aimed at Facilitating Prospective Investors’ Decisions

Sarfraz Hussain (), Mohammad Enamul Hoque, Perengki Susanto (), Waqas Ahmad Watto, Samina Haque and Pradeep Mishra
Additional contact information
Sarfraz Hussain: Putra Business School, Universiti Putra Malaysia, Serdang 43400, Selangor, Malaysia
Mohammad Enamul Hoque: BRAC Business School, BRAC University, Dhaka 1212, Bangladesh
Perengki Susanto: Department of Management, Universitas Negeri Padang, Padang 25131, Indonesia
Waqas Ahmad Watto: Commerce Department, Bahauddin Zakariya University, Multan 60000, Pakistan
Samina Haque: BRAC Business School, BRAC University, Dhaka 1212, Bangladesh
Pradeep Mishra: College of Agriculture, Jawaharlal Nehru Krishi Vishwavidyalaya, Powarkheda, Narmadapuram 461110, India

Sustainability, 2022, vol. 14, issue 16, 1-14

Abstract: The main objective of this study is to find out why sugar companies’ revaluation of their fixed assets has no direct financial impact. The purpose of this financial statement analysis of the sugar sector is to help potential investors make better decisions. It can also be used to address information asymmetries and alert investors. Fixed assets form a major part of a company’s value. During 2013–2018, 19 selected enterprises of Pakistan’s sugar sector adopted the International Accounting Standards Board’s international accounting standard 16 for fixed assets. Ordinary least squares, fixed effects, and random effects methods were used as a static panel, a panel-corrected standard errors method was used for the robust standard error and the system generalized method of moments was used as a dynamic panel. The surplus had a negative impact on operative income on revaluation of fixed assets in sugar businesses. As expected, revaluation by fixed asset firms resulted in changes in potential outcomes, as measured by cash in operating income and revenue, both of which were extremely negative. The return on assets was also linked to revaluation balance. The debt over the proportion of assets resulted in a strong correlation between revaluations, which meant that motivation affected how the volatility in asset value reflected the revaluation. Relationships were generally worse and more uncertain for listed companies at a time of strong economic volatility. Investors should not consider such accounting justice. The price-earnings ratio had a beneficial effect on operative income. The statistics support the idea that external concerns help the revaluation of assets.

Keywords: revaluation; fixed assets; FASB; prospective investors; investment decisions; Financial Accounting Standards Board (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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