FAIR VALUE ACCOUNTING AND FINANCIAL PERFORMANCE OF LISTED OIL AND GAS COMPANIES IN NIGERIA

Abstract

This study investigated fair value accounting and financial performance of listed oil and gas companies in Nigeria. This study was anchored on the agency theory. An ex-post-facto research design was used. The population of this study is made up of Eight (8) listed oil and gas companies in Nigeria on the Nigeria Exchange Group (NGX) spanning from 2014-to-2023. The study used judgmental (purposive) sampling technique in selecting seven (7) oil and gas companies listed on the Nigeria exchange group (NGX) due to availability and completeness of the secondary data. The cross-sections included in the study was seven (7) listed oil and gas companies; sample period Ten (10) years, and total observation was Seventy (70) sampled from 2014 to 2023. The secondary data was gathered by downloading published annual accounts of the seven (7) selected oil and gas companies on the Nigerian Exchange Group website. The study used descriptive statistics; Augmented Dickey-Fuller (ADF) unit root test; Hausman Test, and Fixed-Effect Regression Model (FEM) were used for the data analyses. The results revealed that; the effect of fair value of non-current assets on earnings per share of listed oil and gas companies in Nigeria is negative and statistically significant; the effect of fair value of current assets on earnings per share of listed oil and gas companies in Nigeria is positive and statistical significant and the effect of fair value of total liabilities on earnings per share of listed oil and gas companies in Nigeria is positive and statistically significant. The study generally concluded that the effect of fair value accounting on financial performance of listed oil and gas companies in Nigeria is positive and statistically significant for the time frame (2014 – 2023) investigated. Thus, the study recommended amongst others that the oil and gas companies in Nigeria should regularly re-evaluate tangible and intangible assets to reflect their fair value accurately. This can enhance the asset base on the balance sheet and potentially lead to higher depreciation deductions, impacting net income positively.