Financial Statements’ Analysis and IFRS Adoption during the Transitioning Period: The Case of Nigerian Banks

Nwaobia, Appolos N., Jayeoba, Olajumoke O., Ajibade, Ayodeji T.


This study examined the effect of adoption of IFRS on financial statement analysis in Nigerian banks during the transitioning period. The same-firm year research design was employed using data from the financial statements prepared under SAS and IFRS for year 2011 for selected Nigerian banks. These data included: Current Ratio (CR), Return on Capital Employed (ROCE), Earnings per Share (EPS), and Debt to Equity (DE). Analyses of the data using ANOVA tests, correlation and OLS regression techniques yielded mixed results. The ANOVA results indicated no significant statistical difference in means of financial ratios of SAS and IFRS financial statements while the results of the correlation and the regression analyses suggest strong positive relationships between each pair of ratios. SAS financial ratios also exerted significant positive effect on IFRS financial ratios for each pair with coefficients greater than 1. The study concluded that IFRS ratios provide larger positive variations when their equivalent SAS ratios are positive and vice versa. Also, financial statements prepared under IFRS seem to reflect better economic reality of the sampled banks’ business activities because of its measurement procedures and more extensive disclosure requirements. Thus, we recommended that for effective analysis of financial statements prepared under IFRS, there is need for the financial analysts to take into consideration the numerous narrative reports and disclosures provided since values presented in the statements of comprehensive income and financial position alone cannot provide the adequate information required to make informed economic decisions.

Keywords: IFRS adoption, Current ratio, fair value, impairment adjustment, EPS.

Full Text: PDF
Download the IISTE publication guideline!

To list your conference here. Please contact the administrator of this platform.

Paper submission email:

ISSN (Paper)2222-1697 ISSN (Online)2222-2847

Please add our address "" into your email contact list.

This journal follows ISO 9001 management standard and licensed under a Creative Commons Attribution 3.0 License.

Copyright ©