Incremental Value Relevance of Accounting Figures during Principles Based Accounting Regime of Nigerian Banking Sector

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The post-event consequences after the adoption of principles-based accounting standards globally known as International Financial Reporting Standards (IFRS) have left scholars and professionals with an unanswered puzzle as to whether there has been incremental value relevance of accounting figure in the published financial reports of listed firms after the adoption. This study therefore investigated the incremental value relevance of accounting figures of listed deposit money banks in Nigeria after the adoption of IFRS in Nigeria. Archival research design was adopted in the study by sourcing the data for independent variables earnings per share (eps), changes in earnings per share (eps), and book value per share (bvps) from the published financial statements of the 7 judgmentally selected sampled banks out of the population of 17 banks while data for the dependent variable i.e. market share price (msp) were gathered from the official website of asset management at www.cashcraft.com. Two different accounting standard regimes, 9 years (2003-2011) pre-IFRS adoption era and 9 years (2012-2020) post-IFRS adoption era were investigated from 2003 to 2020. Edward Ben Olhson econometric model was adopted for both pre-adoption and post-adoption accounting regimes. The data were analyzed through the application of SPSS version 12. The results for both pre-IFRS R-squared is 0.778 while post-IFRS R-squared is 0.232. It implies that the accounting figures contained. in the financial reports of deposit money banks in Nigeria was 78% value relevant before the adoption of IFRS while that of post-IFRS adoption era is 23% value relevant. The study concluded that there was no incremental value relevance of accounting figures after the adoption of IFRS. It was recommended that accounting standards setter and regulatory body should ensure strict adherence to the rules of engagement in the application of the principles-based accounting standards in order to reap the benefits inherent in its usage and achieve the much-desired value relevance of accounting figures in the banking sector in Nigeria.