Motivation on accounting choice of actuarial gain (loss)
Journal Title: Journal of Economics, Business, & Accountancy Ventura - Year 2014, Vol 17, Issue 3
Abstract
This research aims to test whether there is any motivation from the management to choose their accounting policy in recognizing actuarial gain (loss) related to the defined benefit plan between corridor method and full recognition through OCI method based on IAS 19 (2004). Motivation theories in this research are asset pricing motivation, contracting motivation, and influencing external parties motivation. The research was done by using logit model and cross-section. The sample was taken from listed companies in 17 Europes Premier Indices from 2005 to 2012. The result shows that there are debt covenant motivation and these affect external parties motivation from management to recognize actuarial gain or loss. This result also shows that risk that affects management decision to switch from corridor method to full recognition through OCI method at which companies having high risk tend to avoid full recognition through OCI method to prevent fluctuation on financial statements. This research conclusion confirms previous research that there are management motivations in selecting accounting method.
Authors and Affiliations
Julio Hokky Sahputra, Taufik Hidayat
Keywords
Related Articles
- EP ID EP468525
- DOI 10.14414/jebav.v17i3.363
- Views 70
- Downloads 0
The Islamic Capital Market Response to the Real Earnings Management
This study aims to prove the effect of the company's status, i.e membership on the Islamic capital market and the status as suspect firm, as a determinant of real earnings management (REM). REM is conducted by abnormally...
Growth strategy as a mediator of the relationship between entrepreneurial competencies and the performance of SMEs
Factors affecting the success of SMEs have been widely studied, but generally they only focus on the individual characteristics as a factor affecting the success of SMEs. This study attempts to analyze the role of the gr...
Consumers’ preferences on the use of eco-friendly bags: a green marketing perspective
There has been a radical shift in consumer behavior towards a green lifestyle. Environmentalists were involved in massive green marketing campaigns trying to reduce the impact of plastic products to the environment. Howe...
Publicness and strategic planning of public institutions: Evidence from Indonesia
Strategic planning has become a very common practice in public organizations. Research shows the positive impacts of strategic planning on the firm performance. This study examines the impacts of publicness on planning f...
Profit efficiency of shariah banks in Indonesia and the determining factors: Using Stochastic Frontier Analysis Method
This study aims to measure the efficiency of profit and examine the factors that affect the efficiency of shariah banks profit in Indonesia such as the size of banks, risk financing, and capital adequacy. This study used...