The Determinants of Accounting Inventory Valuation Methods: Does Firm Size Matter?

Abstract

The inventory valuation method has significant implications for
financial statements and managerial decision-making. This study
evaluates the influence of inventory intensity, variability, current
ratio, and leverage on selecting an inventory valuation method with
firm size as moderation. The research object includes all companies
listed on the Indonesia Stock Exchange for 2020-2023. The sample in
this study was obtained using the purposive sampling method, with
the final samples are 303 companies with a total of 1,212 observation
data. The collected data were analyzed using logistic regression and
moderation regression analysis for hypothesis testing. The results
show that variability, current ratio, and leverage have a negative
effect on the selection of inventory valuation methods. Meanwhile,
inventory intensity does not affect the selection of inventory
valuation methods. Furthermore, firm size strengthens the influence
of inventory intensity and variability on the selection of inventory
valuation methods. This study shows that selecting the correct
inventory valuation method can be a company's strategy for
optimizing inventory management.