Fair Value Gains or Lossses and Earnings Quality of Listed Nigerian Deposit Money Banks.

Abstract

Nigeria has taken a number of steps to increase the accuracy of reported results, which includs the adoption of the International Financial Reporting Standards, that involve fair value to measure for specific assets along with liabilities. In this study, the effect of fair value gains and losses (FVGL) and extra comprehensive income (OCI) on the standard of earnings reported by deposit money institutions in Nigeria was examined. The study uses a correlational research methodology and looked at information gathered between 2016 and 2021 from thirteen Nigerian banks. Ordinary least square (OLS) was used in conjunction with SPSS (16 Ver) to evaluate two hypotheses. The outcome showed a positive and substantial correlation between the fair value gains/losses recorded in net income (NI) as well as the earnings quality reported by Nigerian DMBs. While the fair value gains/losses in other comprehensive income is not significantly associated with earnings quality reported by listed Nigerian DMBs. The study is consistent with agency & signalling theory used to frame the research and recommends that regulatory authorities should provide training via workshops & seminars for preparers of financial statement to reduce the complexity in fair value measurement of financial instruments. Also, further research is recommended on the topic to include the influence CG the above relationship.