IIARD International Institute of Academic Research and Development

Journal of Business and African Economy (JBAE )

E-ISSN 2545-5281
P-ISSN 2695-2238
VOL. 11 NO. 2 2025
DOI: 10.56201/jbae.v11.no2.2025.pg61.77

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Fair Value Accounting and Earnings Quality of Quoted Commercial Banks in Nigeria

AGOFURE, Edesiri Great, OKOLIE, Augustine O

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Abstract

This study investigated the impact of fair value accounting on earnings quality of selected banks in Nigeria. It examined how fair value adoption influences earnings quality by analyzing data from eight commercial banks from 2013 to 2023. The dependent variable, earnings quality, was measured using earnings predictability, while the independent variables include fair value accounting (through other comprehensive income, net operating income, the logarithm of total asset values, and leverage). Using ex-post facto research design and panel data regression analysis, the study finds evidence that all independent variables fair value accounting significantly affect earnings quality. The study recommends that bank management should consider market conditions and economic implications when adopting fair value accounting. Additionally, financial statement regulators should establish conditions that support the effective application of fair value accounting to avoid impairing earnings quality.

keywords:

Fair values, Earnings quality, Firm Size, leverage

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