FAIR VALUE ACCOUNTING PRACTICES AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

This study determined the relationship between fair value accounting and financial performance of manufacturing firms in Nigeria. The study employed an ex-post facto research design was adopted which involve quantitative methods of data presentation, data analysis and hypothesis testing. The population of study consists of all the listed manufacturing firms in Nigeria but the study selected four companies in Nigeria. The study adopted interval scale of measurement and preceding year basis of sampling, with a sample size of 28 year. Six (6) years each from the four selected manufacturing firms in Nigeria from 2015 to 2021. The source of data was secondary, obtained from Nigerian Exchange Group (NGX) formally known as Nigerian Stock Exchange (NSE). The study adopted multiple linear regression analysis to analyze the data with the help of Statistical Package for Social Science (SPSS) to determine the relationship between the variables to answer the research questions and test the null hypotheses at 0.05 level of significant. The study findings shown that, total assets fair value (TAFV) and fair value changes during the year (FVCDY) of fair value accounting had no significant relationship on return on equity (ROE) of financial performance of manufacturing firms in Nigeria. Therefore, the study recommended that firms should exercise caution in the application of fair value accounting most especially in term of forecasting return on capital employed and return on equity in order to avert the cyclical effect of it.