A study on the significance of heritage assest disclosure on the profitability and liquidity of government owned and controlled corporations in the Philippines

• Main Authors: Cheng, Elaine T., Garcia, Dawn A., Tan, Ann-Ria B., Velasquez, Eugene Eligio T.
• Format: text
• Language: English
• Published: Animo Repository 2010
• Subjects: Corporations, Government > Philippines; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14007
• Institution: De La Salle University

This paper discusses the effect of heritage asset disclosure together with exogenous variables such as Heritage Asset Size, Financial Leverage and Firm Age on profitability and liquidity measures (endogenous) of Government Owned and Controlled Corporations in the National Capital Region of the Philippines. The extent of Heritage Asset Disclosure was measured using a checklist formulated from various international standards while the disclosure index was derived using dichotomous procedure. Firm profitability was measured using Return on Assets, Return on Equity and Level of Net Income. Firm Liquidity was expressed using Current Ratio, Quick Ratio, Cash Flow Margin and Working Capital Ratio. Using the panel data regression analysis, the researchers have found out that disclosure index and the control variables have no significant effect on liquidity, return on equity and net income using 5% significance level test. However, return on asset of GOCC's which have recorded their heritage assets at appraised values are affected negatively by size of heritage assets to total assets and years of holding heritage assets while return on assets of the whole sample is significantly positively affected by size of heritage asset under 5% significance level test. Disclosure index had not appeared to affect any proxy for firm performance whether the respondents disclose heritage assets at physical quantity, acquisition cost, or appraised values.