Analysis Impact of PSAK 24 Revision on Equity, Other Comprehensive Income, and Stock Returns

DOI

10.2991/apbec-18.2019.58How to use a DOI?

Keywords

PSAK 24, employee benefits, changes in equity, actuarial assumptions, value relevance, other comprehensive income

Abstract

This study aims to analyze the impact of changes in the Statement of Financial Accounting Standards Indonesia (PSAK) 24 Revision on equity, other comprehensive income (OCI), and stock returns. This research uses companies listed on the Indonesia Stock Exchange (IDX) during 2013–2016 as a sample. The results show that changes in equity after the application of PSAK 24 Revision are higher than before. Actuarial gains (losses) dominate a company's OCI, in terms of both existence and value. In 2015 and 2016, more than 95% of companies reported actuarial gains (losses) as OCI components. In terms of value, the average proportion of actuarial gains (losses) exceeds 50% of the total OCI of firms. The most significantly disclosed assumptions are the discount rate and salary growth. The discount rate proved to be positively correlated with the OCI of actuarial gains (losses), whereas salary growth is negatively correlated with actuarial gains (losses). This study finds that OCI from actuarial gains (losses) is significantly associated with stock returns.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Juwita Ramadhani
AU  - Dwi Martani
PY  - 2019/07
DA  - 2019/07
TI  - Analysis Impact of PSAK 24 Revision on Equity, Other Comprehensive Income, and Stock Returns
BT  - Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018)
PB  - Atlantis Press
SP  - 414
EP  - 420
SN  - 2352-5428
UR  - https://doi.org/10.2991/apbec-18.2019.58
DO  - 10.2991/apbec-18.2019.58
ID  - Ramadhani2019/07
ER  -