Click here to download

Asset Revaluation: Management During the COVID-19 Crisis
Journal Title: MANAGEMENT CONTROL 
Author/s: Salvatore Madonna, Greta Cestari, Francesca Giuliani 
Year:  2021 Issue: Language: Italian 
Pages:  24 Pg. 41-64 FullText PDF:  298 KB
DOI:  10.3280/MACO2021-003003
(DOI is like a bar code for intellectual property: to have more infomation:  clicca qui   and here 


Starting from the accounting advantages that a revaluation of fixed assets can generate in terms of strengthening the capital structure of firms, this paper illustrates that the management of small and medium-sized Italian companies, with low debt ratios, in times of crisis, can improve economic and financial perfor-mance through the use of this accounting tool. In an accounting system such as the Italian one based on the valuation of assets according to the historical cost method, the revaluation granted by special laws allows management to strengthen the perception of the asset structure's solidity without directly intervening on the capital in the event of losses. The research was applied to the revaluation allowed in Italy in 2008. This was the time of the world market crisis, which permitted, like the last regulatory interven-tion issued during the COVID-19 emergency, a revaluation that was valid for civil law purposes only, without an obligation to a fiscal realignment. The results of this research show that management re-evaluates fixed assets to give a better represen-tation of assets, specially before requesting loans from credit institutions. However, only companies that already had a healthy financial structure have obtained in-come benefits. Compared to companies that have not proceeded with a revalua-tion, this accounting concession has enabled a significant improvement in the profitability of companies. This is a relevant finding, especially in times of market crisis such as this COVID-19 pandemic in which it is necessary that healthy com-panies can overcome a temporary lack of liquidity and become competitive again.
Keywords: Asset revaluation, Accounting choice, Crisis, Earnings management, 2008 Global financial crisis, COVID-19.

  1. Aboody D., Barth M.E., Kasznik R. (1999), Revaluations of fixed assets and future firm performance: evidence from the U.K., Journal of Accounting and Economics, 26, pp. 149-178.
  2. Aljinović Barać Z., Šodan S. (2011), Motives for asset revaluation policy choice in Croatia, Croatian Operational Research Review, 2(1), pp. 60-70.
  3. Amaduzzi A. (1957), Economia degli impianti nelle imprese industriali, Genova, M. Bozzi.
  4. Andrei P. (2019), Introduzione all’economia d’azienda, Torino, Giappichelli.
  5. Azzali S. (2019), Financial Reporting and Accounting Standards, Torino, Giappichelli.
  6. Barlev B., Fried D., Haddad J. R., Livnat J. (2007), Reevaluation of revaluations: a cross-country examination of the motives and effects on future performance, Journal of Business Finance & Accounting, 34(7-8), pp. 1025-1050.
  7. Barth M.E., Clinch G. (1998), Revalued financial, tangible and intangible assets: association with share price and non-market-based value estimates, Journal of Accounting Research, 36, pp. 199-233.
  8. Black E.L., Sellers K.F., Manly T.S. (1998), Earnings Management Using Asset Sales: An International Study of Countries Allowing Noncurrent Asset Revaluation, Journal of Business Finance & Accounting, 25(9-10), pp. 1287-1317.
  9. Ceriani G. (2007), Alcuni fondamenti del concetto di bilancio nella dottrina economico-aziendale italiana, in AA.VV., L’analisi degli effetti sul bilancio dell’introduzione dei principi contabili internazionali IAS/IFRS. Gruppo di studio e attenzione dell’Accademia Italiana di Economia Aziendale, Volume 1°, Roma, RIREA, pp. 17-62.
  10. Choi T.H., Pae J., Park S., Song Y. (2013), Asset revaluations: motives and choice of items to revalue, Asia-Pacific Journal of Accounting & Economics, pp. 144-171.
  11. Cotter J. (1999), Asset Revaluations and Debt Contracting, Abacus, 35(3), pp. 268-285
  12. Cotter J., Zimmer I. (1995), Asset Revaluations and Assessment of Borrowing Capacity, Abacus, 31(2), pp. 136-151.
  13. Courtenay S.M., Cahan S.F. (2004), The impact of debt on market reactions to the revaluation of noncurrent assets, Pacific-Basin Financial Journal, 12(2), pp. 219-243.
  14. De Dominicis U. (1955), Le immobilizzazioni tecniche nei problemi d’impresa, Cuneo, Edizioni Ghibaudo.
  15. De Dominicis U. (1959), I bilanci delle imprese in periodi di oscillazione del valore economico della moneta, Torino, Levrotto & Bella.
  16. De Dominicis U. (1960), Studi di ragioneria e tecnica economica, Scritti in onore del Prof. Alberto Ceccherelli, Firenze, Felice Le Monnier, pp. 347-356.
  17. De Dominicis U. (1966), Lezioni di ragioneria generale, Volume IV, Bologna, Azzoguidi.
  18. Easton P.D., Eddey Ph., Harris T.S. (1993), An Investigation of Revaluations of Tangible Long-Lived Assets, Journal of Accounting Research, 31, pp. 1-38.
  19. Ferrero G. (1995), La valutazione del capitale di bilancio, Milano, Giuffrè, pp. 187-208.
  20. Gaeremynck A., Veugelers R. (1999), The revaluation of assets as a signalling device: a theoretical and an empirical analysis, Accounting and Business Research, 29(2), pp. 123-138.
  21. Leo M. (2020), Rivalutazione civilistica (e gratuita) degli asset d’impresa, Plusplus24 Fisco, Il Sole 24 Ore, Norme e Tributi, 9 maggio, pp. 20-21.
  22. Lin Y.C., Peasnell K.V. (2000), Fixed Asset Revaluation and Equity Depletion in the UK, Journal of Business Finance & Accounting, 27(3-4), pp. 359-394.
  23. Lopes A.B., Walker M. (2012), Asset Revaluations, Future Firm Performance and Firm-Level Corporate Governance Arrangements: New Evidence from Brazil, The British Accounting Review, 44, pp. 53-67.
  24. Masini C. (1955), La dinamica economica nei sistemi dei valori d’azienda: valutazioni e rivalutazioni, Milano, Giuffrè.
  25. Meneghetti P. (2020), La rivalutazione dei beni dopo il Coronavirus, Plusplus24 Fisco, Il Sole 24 Ore, Edicola Fisco, 27 aprile, pp. 5-6.
  26. Nobili F., Foschi M. (2020), Rivalutare o no i beni: il peso delle variabili non solo tributarie, Plusplus24 Fisco, Il Sole 24 Ore, Norme e Tributi, 7 settembre, pp. 15-16.
  27. Piras F., Mura A. (2015), Le rivalutazioni da leggi speciali: l’evidenza empirica nei bilanci delle imprese italiane, Rivista dei Dottori Commercialisti, 1, pp. 27-55.
  28. Poddighe F.E, Coronella S. (2007), Possibilità e limiti della rivalutazione economica degli immobili aziendali in caso di deficit patrimoniale, Rivista dei Dottori Commercialisti, 1, pp. 19-51.
  29. Quagli A., Avallone F. (2010), Fair value or cost model? Drivers of choice for IAS 40 in the real estate industry, European Accounting Review, 19(3), pp. 461-493.
  30. Zappa G. (1950), Il reddito di impresa. Scritture doppie, conti e bilanci di aziende commerciali, Milano, Giuffrè.

Salvatore Madonna, Greta Cestari, Francesca Giuliani, Asset Revaluation: Management During the COVID-19 Crisis in "MANAGEMENT CONTROL" 3/2021, pp. 41-64, DOI:10.3280/MACO2021-003003

   

FrancoAngeli is a member of Publishers International Linking Association a not for profit orgasnization wich runs the CrossRef service, enabing links to and from online scholarly content