Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria

This study uses a modified equity valuation model (stock price model) to examine the value relevance of balance sheet components (total liabilities (tl), deposit customer liability (dcl) and non-performing loans (npl)) for the periods before and during transition to IFRS in the Nigerian stock Exchan...

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Main Authors: Muhammad, Yusuf Alkali, Lode, Nor Asma
Format: Article
Published: American Scientific Publishers 2015
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Online Access:http://repo.uum.edu.my/16433/
http://doi.org/10.1166/asl.2015.6190
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spelling my.uum.repo.164332016-04-17T01:14:22Z http://repo.uum.edu.my/16433/ Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria Muhammad, Yusuf Alkali Lode, Nor Asma HF5601 Accounting This study uses a modified equity valuation model (stock price model) to examine the value relevance of balance sheet components (total liabilities (tl), deposit customer liability (dcl) and non-performing loans (npl)) for the periods before and during transition to IFRS in the Nigerian stock Exchange (NSE) Market.A 5-year data of 15 banks listed in the Nigerian stock market is selected as sample for the study.Using stock price model, the tl, dcl and npl measures were transformed into natural log (ln) form to arrive at a compatible and normal data.The results of the model provide evidence that accounting information is value relevant among Nigerian Banks.This is proved from the coefficient of tl and npl that negative but significant in the two periods of NGAAP and IFRS. In contrast, dcl provides a positive but also significant result under the two periods.The result further proves that IFRS is more value relevant than NGAAP. Lastly, we provide evidence from the R2 that there is greater association between accounting information and stock prices during the transition period (IFRS).Besides the significant of findings of this research to security market, the literature is providing contribution to limited market research in African capital market among banks, particularly in Nigeria after the IFRS adoption. American Scientific Publishers 2015 Article PeerReviewed Muhammad, Yusuf Alkali and Lode, Nor Asma (2015) Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria. Advanced Science Letters, 21 (6). pp. 2015-2019. ISSN 1936-6612 http://doi.org/10.1166/asl.2015.6190 doi:10.1166/asl.2015.6190
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
topic HF5601 Accounting
spellingShingle HF5601 Accounting
Muhammad, Yusuf Alkali
Lode, Nor Asma
Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria
description This study uses a modified equity valuation model (stock price model) to examine the value relevance of balance sheet components (total liabilities (tl), deposit customer liability (dcl) and non-performing loans (npl)) for the periods before and during transition to IFRS in the Nigerian stock Exchange (NSE) Market.A 5-year data of 15 banks listed in the Nigerian stock market is selected as sample for the study.Using stock price model, the tl, dcl and npl measures were transformed into natural log (ln) form to arrive at a compatible and normal data.The results of the model provide evidence that accounting information is value relevant among Nigerian Banks.This is proved from the coefficient of tl and npl that negative but significant in the two periods of NGAAP and IFRS. In contrast, dcl provides a positive but also significant result under the two periods.The result further proves that IFRS is more value relevant than NGAAP. Lastly, we provide evidence from the R2 that there is greater association between accounting information and stock prices during the transition period (IFRS).Besides the significant of findings of this research to security market, the literature is providing contribution to limited market research in African capital market among banks, particularly in Nigeria after the IFRS adoption.
format Article
author Muhammad, Yusuf Alkali
Lode, Nor Asma
author_facet Muhammad, Yusuf Alkali
Lode, Nor Asma
author_sort Muhammad, Yusuf Alkali
title Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria
title_short Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria
title_full Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria
title_fullStr Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria
title_full_unstemmed Value relevance of liabilities and non-performing loans in emerging market: IFRS adoption in Nigeria
title_sort value relevance of liabilities and non-performing loans in emerging market: ifrs adoption in nigeria
publisher American Scientific Publishers
publishDate 2015
url http://repo.uum.edu.my/16433/
http://doi.org/10.1166/asl.2015.6190
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score 13.154949