IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 11 NO. 4 2025
DOI: 10.56201/ijssmr.vol.11no4.2025.pg475.486

---

Fair Value Accounting and Earnings Quality of Listed Deposit Money Banks in Nigeria.

Dorathy Christopher AKPAN

---

Abstract

The quality of reported earnings could be eroded if assets and liabilities are not reported at their fair values as such financial statements lack global comparability and consistency. The main objective of this study was to examine the effect of fair value accounting on earnings quality of listed deposit money banks in Nigeria. The study employed ex-post factor research design; the population of the study comprised 13 deposit money banks out of which 11 were purposively selected for the study. The study used secondary data, panel data regression technique was adopted in analyzing the data and the statistical package utilized for the study was SPSS version 21. The results of the analysis revealed that fair value gain or loss through profit/loss has nonsignificant effect on earnings persistence; fair value gain or loss through other comprehensive income has significant negative effect on earnings persistence and fair value intensity has significant negative effect on the earnings persistence of listed deposit money banks in Nigeria. It was concluded that fair value accounting has significant effect on earnings quality of listed deposit money banks in Nigeria. Therefore, it was recommended that management of deposit money banks should consistently follow the criteria of IFRS 9- Financial instrument and IFRS 13- Fair value measurement in classifying and measuring the elements of financial statement.

keywords:

Fair value accounting, earnings quality, earnings persistence, fair value intensity

---

References:

Abiahu, L., Salae, P., & Jacob, T. (2024). The effect of fair value on profitability and firm value
with focus on deposit money banks listed on the Nigerian Stock Exchange International
Journal of Financial Research, 6(4), 99 – 113.
Akpan, D. C., Charles, J. U., & Nkanta, U. O. (2022). Determinants of fair value accounting
measurement of biological assets; empirical evidence of listed agricultural firms in
Nigeria. African Journal of Business and Development Economics, 2(11), 72 -84
Alves, C., Adesanmi, A., Sanyaolu, O., Isiaka, M., & Fadipe, O. et al., (2020). Fair value
measurement, depreciation and profitability of listed manufacturing Companies in
Nigeria. International Journal of Scientific Research and Innovative Technology, 4(9),
153-176.
Andrew, K.,Ahmad, E. & Aladwan G. (2020). The effect of fair value accounting on Jordanian
investment properties: An empirical study on Jordanian listed real estate companies.
International Journal of Financial Research, 6(4), 99 – 113.
Bratten, M., Dechow, N. & Schrand, H. (2023). An experiment in fair value accounting:
Investment vehicles. European Accounting Review, 17(2), 271-303.
Chukwu, L., Jayasekara, S. D., Perera, K. W. & Ajward, A. E. (2020). Effect of fair value
accounting on the company's reputation. International Journal of Accounting and
Economics Studies, 4 (1) 36-45.
Daifei, T., Ewert, D. & Wagenhofer, E. (2023). Effect of fair value accounting on asset
valuation in public limited companies: A study of petroleum companies in Nigeria.
Shaban, O. S., Alqtish, A. M., & Qatawneh, M. (2020). The impact of fair value accounting on
earnings predictability. Evidence from Jordan. Asian Economic and Financial
Review,10(12),1466-1479.
Sodan, S. (2015). Application of fair value accounting would lead to a higher level of
earnings through net income in comparison to banks.
Takacs, T., Szucs, D., Kehi, A. Fodor (2020). The effect of fair valuation on bank’s
earnings quality: Empirical evidence from developed and emerging European
countries.
Yao, D., Percy, M. Stewart, J. & Hu, F. (2018). Determinants of discretionary fair value
measurements: The case of level 3 assets in the banking sector. Accounting and Finance
Association of Australia and New Zealand, 58(2), 561 – 597.

DOWNLOAD PDF

---

Back