FAIR VALUE GAINS AND LOSSES AND PERCEPTIONS OF EARNINGS QUALITY: EVIDENCE FROM NIGERIAN DEPOSIT MONEY BANKS

Gospel J. Chukwu (), Godwin Israel Ebirien (), Fiito K. Peekate () and Amos Namapele ()
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Gospel J. Chukwu: Department of Accounting, Postal: Federal University Otuoke,, Bayelsa State, Nigeria,, https://journal.citn.org/
Godwin Israel Ebirien: Department of Accountancy,, Postal: Ken Saro-Wiwa Polytechnic,, Bori, Rivers State, Nigeria,, https://journal.citn.org/
Fiito K. Peekate: Department of Accounting, Postal: Ignatius Ajuru University,, Port Harcourt, Rivers State, Nigeria,, https://journal.citn.org/
Amos Namapele: Department of Accountancy,, Postal: Ken Saro-Wiwa Polytechnic,, Bori, Rivers State, Nigeria,, https://journal.citn.org/

Journal of Taxation and Economic Development, 2020, vol. 19, issue 2, 65-81

Abstract: The need to increase the quality of reported earnings in Nigeria has led to many efforts, including the adoption of International Financial Reporting Standards, which introduced fair value measurement for certain assets and liabilities. This study determined whether the perception of investors on the quality of earnings reported by banks is affected by the fair value gains and losses (FVGL) reported in income statements (NI) and other comprehensive income (OCI). The study used cross-sectional research design, and analysed data obtained over the period 2012 to 2016, from thirteen banks in Nigeria. Two hypotheses were tested using ordinary least square (OLS). The result revealed that investors' perception of earnings quality is not associated with the FVGL reported in NI and OCI. We attribute this result to learning curve and preponderance of unsophisticated investors in the Nigerian stock market. The paper recommends regular training and retraining on accounting for financial instruments for preparers and users of financial statements, auditors and regulators.

Keywords: Fair value gains and losses; financial instruments; perceptions of earnings quality; International Financial Reporting Standards (search for similar items in EconPapers)
Date: 2020
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