The Contribution of Fair Value Accounting on Corporate Financial Reporting in Nigeria

Abstract

This study examined the contribution of fair value accounting on corporate financial reporting in Nigeria. The objective of the study is to ascertain the level and contribution of fair value accounting on providing useful information for investor’s in Nigeria, to find out if Nigeria capital market structure pose a challenge to implementation of fair value accounting, and to determine if full fair value of financial instruments fulfils the aim of performance reporting. The method of data collection used in this study was field survey method involving the use of questionnaire administered to 562 samples. The method of data analysis was the Kruskal-Wallis rank sum test statistic. From the result of the analysis, it was found that the implementation of fair Value Accounting provides more useful Information to Investors than historical cost reporting. Also, it was observed that the Nigeria capital market structure would pose a challenge to implementation of fair value accounting. It was equally found that the full fair value of financial instruments fulfils the aim of performance reporting. The determination of the overall growth of most economy depends on how efficient and effective the stock market is, and in the Nigeria case there are still lots of challenges that have hindered the Nigerian Capital market from attaining international status and these could pose a challenge to implementation of fair value accounting in Nigerian financial system.