Abstract
According to generally accepted accounting principles as applicable in Pakistan, all the listed companies, in addition to the
company’s act 2017, must follow international accounting / financial reporting standards. For subsequent measurement IAS-16 PPE
gives the companies two options, either measure their non-current tangible assets on Cost model or revalue them. As the objective
of the FS is to fulfil the information needs of the users, especially the shareholders, and fair value measurement provides more
relevant information through which the quality of decision making of the shareholders can be improved. In addition, the
management as an agent of the shareholders may have their own motives for measuring the NCA on fair value. The purpose of this
research is to find out the management motives underpinning the revaluation of NC tangible assets. For the said purpose 10 years
data was collected i.e., for the period from 2009-2018 for 109 companies listed on Pakistani stock market which revalued their noncurrent tangible assets during that period. This study examined the different motives of management like leverage, size of the firm,
fixed assets intensity, liquidity, growth, ownership structure, bonus issue, disclosure and CFO have on the revaluation decision.
For the analysis purpose the study used Logistic regression model as the predicted variable is binary in nature which is coded as
dummy variable. The findings show that the leverage has no significant impact on the decision to revalue the NCA. As for as size
of the firm is concerned, this revealed a positive and a significant impact on the decision to revalue the non-current assets. The
study found that the fixed assets intensity has a significant impact on the decision to revalue the non-current assets. The relationship
between the liquidity and revaluation decision was found negative but insignificant. The results also cleared a positive and almost
significant relationship between the revaluation decision and growth and a negative but significant relationship between the
revaluation decision and presence of foreign investors in the portfolio of shareholders. Stock dividend or bonus shares issuance has
no significant association with the dependent variable. Cash flow from operations negatively and significantly related to the
predicted variable. Eventually it was concluded that size of the, fixed asset intensity, growth opportunities and decline in the
operational cash flows will motivate the management to revalue the non-current assets according to IAS -16.
Khalid Mahmood Ahmad, Dr. Rameez ul Rahman, Dr. Muhammad Akram, Muhammad Mustafa, Zohair Farooq Malik. (2020) Managerial Motives Underlying the Revaluation of Non-Current Tangible Assets: A Study of Non-Financial Sector Companies Listed on Pakistan Stock Market, Paradigms , Vol 14, Issue .
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