COMPARATIVE ANALYSIS OF PERFORMANCE MEASUREMENT OF NIGERIAN BANKS UNDER IFRG AND NIGERIAN GAAP
The globalization of business had necessitated international financial reporting benchmark in order to present a globally accepted and high quality financial statement. The international financial reporting standard (IFRS) requires an entity to explain how the transition from local GAAP to IFRS affects it reported financial statements. However, accounting under IFRS and pre-changeover Nigerian GAAP hampers the consistency of time of financial statements due to application of fair value accounting. This study examines the impact of IFRS adoption on the performance measurement of Nigerian banks using financial ratios selected from four major categorizations of financial ratio. The study was conducted through comparison of ratios computed from IFRS based financial statements and Nigerian GAAP based financial statements for the 2011 year of transition to IFRS. The Kolmogorov-Simonov and the Shapiro-Wilk tests were used to determine the normality of the data. Dependent sample t test and Wilcoxon signed-rank test were employed in testing whether significant difference exists between the pair of ratios at 5% level of significance for liquidity and investment ratios but not statistically significant for profitability and capital structure ratios. It was concluded that the differences in the adoption of IFRS on the profitability and capital structure measurement parameters in banking sector are not statistically significant but liquidity and investment performance measurement are statistically significant but liquidity and investment performance measurement are statistically significant. Consequently, the study among others recommends that analysts and other financial statement users should be mindful of the new features of financial statement when taking economic decisions as related to the adoption of IFRS in Nigerian banking sector.
