The Impact of Using Historical Value and Fair Value on the Reliability and Relevance of Financial Statements at PT Berkah Jaya

Abstract

This study aims to analyze the impact of using historical and fair value on the reliability and relevance of financial statements at PT Berkah Jaya. In preparing financial statements, the choice between historical and fair value can affect decision making by stakeholders. This study uses a qualitative approach with primary data through interviews and secondary data from the financial statements of PT Berkah Jaya. Historical value is considered to provide high reliability as it is based on actual transactions, while fair value is considered more relevant as it reflects current market conditions. Using a case study approach, data was collected through analysis of PT Berkah Jaya's annual financial statements and interviews with the accounting department. The results show that the use of historical values provides stability to the financial statements, but reduces the relevance of information for decision returns. In contrast, the application of fair value increases relevance but may decrease reliability due to the subjectivity of valuation. The recommendations of this study emphasize the need for a combination of measurement methods to improve the quality of financial reporting.