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Company Age in Accounting

Navigasi - In accounting, the term age of the company is known. According to (Asfahani, 2017) argued that "The age of the company is defined how far the company can maintain its existence in the business world from the start of its operation".

Company Age in Accounting
Company Age in Accounting


According to (Wallace, et al) in (Marfuah and Purnawati, 2013) defines as follows. "The longer the age of the company will provide a wider disclosure of financial information than other companies with a shorter age on the grounds that the company has more experience in annual disclosures".

According to (Oktavianti and Wahidahwati, 2014) argued that "The age of the company is the beginning of the company carrying out operational activities so that it can maintain the company's going concern or maintain its existence in the business world. The longer the age of the company, the wider the disclosures made related to creating confidence in outsiders in the quality of the company.

Based on the definitions above, it can be concluded that the age of the company indicates the beginning of the company carrying out operational activities and being able to survive. Companies that have long been established, the wider the disclosure of information by the company and proves that the company is able to survive and continue to exist with the advantages it has to create confidence in outsiders about the quality of the company.

Factors Affecting Company Age


Company age is the length of time a company can survive and be able to compete in the business world. Company age can be affected by Break Event Point (BEP) and Return On Investment (ROI). Break event point is a condition where the total income and expenses are calculated on a balanced scale. Break Event Point (BEP) is used to compare the number of goods produced and how much income is received.

Return on investment (ROI) is the ability of a company to earn a profit based on the investment that has been issued. If the return on investment of a company is not achieved, it will certainly have an impact on the continuity of the company's operations and will experience bankruptcy.

Company Age Calculation Indicator


The age of the company in this study is measured by the year of the last annual report (research) minus the year the company first went public. Company age can be measured by the formula:

age of company = year of company end - year of company going public

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