The Value Relevance of Asset and Liabilities after Adoption of IFRS among Nigerian Financial Institutions

Abstract

This study discusses and examined the value relevance of assets, liabilities and non-performing loans among Nigerian banks after the adoption of IFRS. Nigerian government mandated all listed firms to adopted IFRS effective January 1, 2012.  Nigerian banks were in financial crisis during the period of 2008 to 2009 because of poor accounting reporting, non-performing loans and non-disclosure of accounting information. Ohlson 1985 model has been adopted for the study. Nigerian been emerging market with a lot of imperfections in the market has provide a value relevance results of accounting numbers. The three variables total assets and liabilities and non-performing loans have been found to have association with share prices. The study shows that total assets and non-performing loans to have a positive relationship with share price and provide more value relevance after the adoption of IFRS. However, total liabilities provide a significant negative relationship with value relevance of accounting information after the adoption of IFRS. This study provides readers with detail picture of value relevance in emerging market like Nigeria and contributes to the emerging markets study on capital markets. This paper has demonstrated that emerging countries in African can provides explanations on the association between accounting numbers and stock prices.

Keywords: Value relevance, disclosures, financial institutions, IFRS, capital market