Difference Tests of Financial Performance before and after the Regulation of the Minister of Finance Number 29 Concerning Asset Revaluation

Putri Ayu, Rindang Widuri, Herlin Tundjung Setijaningsih

Abstract

This research conducted two different tests of financial performance in the manufacturing industry in Indonesia. The purpose of the first test is to find empirical proof of the difference in financial performance before and after the Regulation of the Minister of Finance Number 29 Concerning Asset Revaluation. The purpose of the second test is to test the difference in financial performance when the company implements the revaluation method when the Minister of Finance Regulation Number 29 is still valid, compared to after the regulation is no longer valid. In this study, the financial performance used five proxies tested: operating profit margin (OPM), debt-to-equity ratio (DER), total asset turnover (TATO), return on assets (ROA), and long-term debt-to-equity ratio (LTDER). Using paired samples t-test with the statistical program SPSS 26, the results of the study prove that in the first test, there is no difference in the ratio of OPM and LTDER before and after the regulation. However, there are differences in the ratio of DER, TATO, and ROA before and after the regulation. Meanwhile, in the second test, the results show no differences in the ratio of OPM, DER, ROA, and LTDER when companies apply the revaluation method when the regulation still applies unlike when the regulation is no longer valid, but there is a difference in the ratio of TATO when the regulation still applies unlike when the regulation is no longer valid. As for the study novelty, there are a cut-off period using the Minister of Finance Regulation Number 29 and an additional test to ensure that the tax incentives provided by the government through the regulation provide good results on financial performance, as measured by the OPM, DER, ROA, LTDER, and TATO ratio proxies.

 

Keywords: cost method, revaluation method, operating profit margin, debt-to-equity ratio, total asset turnover, return on assets, long-term debt-to-equity ratio, Regulation of the Minister of Finance No. 29.

 

DOI: https://doi.org/10.55463/hkjss.issn.1021-3619.61.37


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