Fixed Asset Revaluations and Managerial Incentives |
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| Authors: | PHILIP BROWN HY IZAN ALFRED L LOH |
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| Institution: | Philip;Brown is KPMG Peat Marvick Professor of Accounting and H. Y. Izan is Professor of Accounting and Finance, Department of Accounting and Finance, University of Western Australia Afred;L. Loh is a Lecturer in Accounting, Nanyang Technological University, Singapore. |
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| Abstract: | The study attempts to explain why Australian companies revalue their fixed assets, when a revaluation, by itself , has no discernible direct effect on cash flows and is costly to carry out. A revaluation is hypothesised to affect contracting and political costs. It may also help resolve problems associated with information asymmetries, or be used to signal information to investors. The results support the proposition that economic forces help explain the decision to revalue assets. |
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| Keywords: | Fixed assets Incentives Management Revaluation Valuation |
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