Revaluation of fixed assets and its effects on the reported earnings of selected companies in the Philippines

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ID: 284669
2006
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Abstract
The study attempted to investigate the effects of revaluation of fixed assets on the reported earnings of selected companies in the Philippines. Specifically, the study examined the effects of the fixed asset revaluation on the Earnings Per Share (EPS) of the following selected companies: MERALCO, ABS-CBN, Makati Medical Center, Philex Mining Corporation and Unilever Philippines, Inc. Likewise, it studied the effects of fixed asset revaluation on the profitability of these selected companies in terms of Rate Earned on Average Total Stockholder's Equity and Rate Earned on Average Total Assets. This study believes that recognition of revaluation of property, plant and equipment in financial reporting will prove to be useful to investors, creditors, management, employees, the government and all others who use financial information as a basis for decision-making. The study was limited only to the selected companies in the Philippines that have chosen to revalue their fixed assets, namely, MERALCO, ABS-CBN Broadcasting Company, Makati Medical Center, Unilever Philippines, Inc. and Philex Mining Corporation covering the years 1997-2004. Three of these companies had already opted to choose not to revalue their fixed assets in 2002. These are the ABS-CBN, Unilever Philippines Inc. and Philex Mining Corporation. As a result, the analysis was affected for three years, namely, periods 2002, 2003, and 2004. For its research methodology, this research used the case study approach and through content analysis, it was able to examine the effect of revaluation on fixed assets on the reported of the selected companies investigated in the study. Findings of the study show that the profitability of the selected companies covered by the research in terms of their Rate of Return on Average Total Stockholder's Equity showed that revaluation of fixed assets is affected (except for Philex Mining Co.) as evidenced by the magnitude of change in the rate of return for eight years period (1997-2004), as follows: A. MERALCO (20.08% - (-64.19%) B UNILEVER PHILS. INC. (15.00% - 1.97%) A. ABS-CBN (2.18% - .33%) B. MAKATI MEDICAL (14.21% - 1.64%) The effects of revaluation of fixed assets on the profitability in terms of Rate of Return on Average Total Assets is just minimal (less than 1%) for the selected companies except for Philex Mining Co. per magnitude of change in the rate of return, as follows: C. MERALCO (3.65% - (-2.90%) D. UNILEVER PHILS. INC. (.86% - .28%) E. ABS-CBN (.84% - .10%) F. MAKATI MEDICAL (.65% -
Reference Key
persistent_1760653342_68f1701e8234d Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Baltazar, William Barja
Journal Malay Journal
Year 2006
DOI
DOI not found
URL
https://animorepository.dlsu.edu.ph/etd_masteral/3374
Keywords Keywords not found

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