International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)


Management Motives Behind the Revaluation of Fixed Assets for Sustainability of Entrepreneurial Companies

Author(s): Rashid Khalil, Dr. Muzaffar Asad, Sajjad Nawaz Khan

In the last decade several companies have revalue their assets. The companies revalue their assets by showing that they want to present a true and fair value of their assets as identified by the international reporting standards. As prescribed in the standards, the purpose of any accounting policy is to give true and fair value of the company to make it more sustainable. Because depiction of true and fair view of the company enhances confidence of the investors, which ultimately keep the company sustainable especially in the case of entrepreneurial ventures. In order to meet the objective of identification of management motives behind the revaluation of assets, primarily literature was reviewed which highlighted certain factors. In order to explore other hidden motives, exploratory study was conducted. The purpose of conducting qualitative research was to identify any other factor which has not yet been covered. For the said purpose data was collected from seven professions; including academicians, entrepreneurs, chartered accountants, and finance heads. The findings revealed that revaluation is done primarily for the improvement of financial position to satisfy the investors so that more funds may be generated. The study suggested a quantitative study on the identified constructs and also suggested the entrepreneurs, policy makers, and governments to revalue the assets appropriately to get maximum benefits of revaluation for the sustainability of the companies.