SOURCE:

Faculty: Management Sciences
Department: Accountancy

CONTRIBUTORS:

Adebayo, M. A.
Okafor, R.

ABSTRACT:

This study assessed the relevance of goodwill measurement in the adoption of IFRS in Nigerian banking sector. Specifically, the study intends to; ascertain whether value relevance of goodwill using average profits method has improved along with the adoption of IFRS in deposit money banks in Nigeria; determine the extent of value relevance of goodwill Using Super Profits method has improved with the adoption of IFRS in deposit money banks in Nigeria and evaluate whether value relevance of goodwill Using Capitalized value of profits method has improved with the adoption of IFRS in deposit money banks in Nigeria. Ex-post facto research design was adopted for the study. The population of the study consists of fifteen quoted deposit money banks on the Nigerian stock exchange from 2007 to 2017. Regression analysis and Chow test were used to test the formulated hypotheses. The study found that value relevance of goodwill has improved using average profits method along with the adoption of IFRS in deposit money banks in Nigeria, also that value relevance of goodwill has not improved Using Super Profits with the adoption of IFRS in deposit money banks in Nigeria. Another finding is that value relevance of goodwill has improved using capitalized value of profits with the adoption of IFRS in deposit money banks in Nigeria. Based on this, the study recommended among others that managers take this opportunity under the IFRS period to improve the alignment of goodwill reporting with the firms’ underlying economic circumstances.