Re-evaluation of Public Companies from a Jurisprudential and Legal Point of View

Document Type : Science - Research (Islamic Financial Rights)

Authors
Amirhossein Esesami 1
Zahra Shiri 2
1 Revaluation of Assets; Public Company; Information Transparency; Luxury Transactions.
2 Islamic Finance Researcher; & DBA Student, Islamic Financial Scientific Association of Iran, Tehran, Iran
10.30497/ifr.2023.244552.1836
Abstract
Transparency of information and up-to-dateness of financial statements of joint-stock companies is one of the important elements in realizing market efficiency. During the last few decades, significant inflations in Iran's economy have doubled the need to reassess the assets of companies, especially public companies and capital market asset-based companies. In inflationary conditions, if the assets are not reassessed, the company's financial statements will not be a favorable report of the company's current situation. Since, from the point of view of famous jurists, shares are the common share of the company's assets, transparency in the description of the characteristics and characteristics of the sold item is one of the conditions for the validity of the sale, and if the description of the sold item is ambiguous in some ways and does not reflect the reality of the sale. , will face the transaction with the suspicion of being fraudulent. This research, with an analytical-descriptive method, has investigated the jurisprudence of the necessity of revaluation of assets in public companies. As a result, it can be said that in a situation where the inflation rate is significant and causes a significant difference in the value of book assets from their fair value on the day, in order to avoid suspicion of fraud in stock trading, especially asset-oriented companies. It is necessary to reassess the assets of these companies and reflect them in the financial statements.
Keywords
Revaluation of Assets
Public Company
Information Transparency
Luxury Transactions
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Volume 12, Issue 3 - Serial Number 25
February 2023
Pages 557-594

  • Receive Date 22 May 2023
  • Revise Date 19 July 2023
  • Accept Date 25 September 2023