Relevansi Nilai Pilihan Metode Nilai Wajar untuk Properti Investasi Perusahaan-Perusahaan yang Terdaftar di Bursa Efek Indonesia Periode 2012-2017 – Son Stefanus

ABSTRACT

To increase the relevance of accounting information, international standard setters have issued IAS 40 which provides an opportunity for companies to choose accounting methods for investment properties, namely the fair value method or cost method. However, generally when a financial statement uses fair value accounting method, net income will fluctuate more
than the cost method, this causes investors to predict the company’s profit in the future. In addition, the company must incur high costs to use the fair value method for its investment property. Therefore the purpose of this study is to re-examine the relevance of the value of the choice of the fair value method and the factors that influence the company to choose the
fair value method. This research is based on market efficiency theory which states that the price of traded securities fully reflects all information that is publicly known about the securities, and the study of value relevance investigates the usefulness of accounting information to stock investors including the choice of methods used by managers. Therefore this study hypothesizes that the choice of the fair value method has value relevance in making investment decisions. In addition, earnings management, leverage and company size are important factors in the choice of the fair value method. Hypothesis testing uses linear regression analysis for model 1 and logistic regression analysis for model 2. This study uses secondary data observation techniques obtained from the financial statements of companies listed on the Indonesia Stock Exchange that present investment property during the 2012-2017 period. Based on purposive sampling method obtained a sample of 107 companies. The results of this study indicate that the choice of the fair value method does not affect the stock price. Earnings and leverage management has a negative effect on the choice of the fair value method, while firm size has a positive effect on the choice of the fair value method. The results of this study indicate that the choice of the fair value method does not
have additional information in making investment decisions that are relevant to investors. The higher earnings and leverage management, the more likely companies do not choose the fair value method, while the larger the size of the company, the more likely the company does not choose the fair value method, instead chooses the cost method.

Keywords: value relevance, stock price, earnings management, leverage, size

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