Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria

Ubesie Madubuko Cyril; Akparhuere Godwin Oghenekohwo; Mba Chris Chukwuemeka

doi:doi:10.11648/j.sjbm.20190706.13

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Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria

Ubesie Madubuko Cyril, Akparhuere Godwin Oghenekohwo, Mba Chris Chukwuemeka

Published in Science Journal of Business and Management (Volume 7, Issue 6)

Received: 10 October 2019 Accepted: 28 November 2019 Published: 13 December 2019

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Abstract

Fair value of a firm’s asset is one of the determinants of its net-worth and marketability. It is a rational and unbiased estimate of the potential market price of a good (commodity), stock, service or asset of a firm. The main objective of the study is to determine the effect of fair value accounting on assets of consumer goods manufacturing companies in Nigeria. The study adopted ex-post facto research design and data were sourced from three selected companies through purposive sampling technique. Analysis was carried out on ten years pooled data on total assets (the dependent variable), fair value (proxy by share value), market value (proxy by Net Assets), and depreciation value. The findings show that fair value has significant effect on assets of consumer goods firms in Nigeria. The study recommends that management of consumer goods companies should consolidate on improvement of fair value of firms through their assets management and appropriate policies, adopt the best practices that would raise the share prices and maintain higher book values of the firms, and use depreciation as a source of replacement of old assets thereby stabilizing the Net worth of the firms.

Published in	Science Journal of Business and Management (Volume 7, Issue 6)
DOI	10.11648/j.sjbm.20190706.13
Page(s)	150-158
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Fair Value, Assets, Consumer Goods Firms

References

[1]	Ubesie, M. C. (2018). Lecture notes on contemporary issues in accounting (ACC 916) – Unpublished, March 6, 2019.
[2]	Accounting Tools (2018). Fair value accounting, available at https://www.accountingtools.com/articles/fair-value-accounting.html, assessed on June 21, 2019.
[3]	Balogun, E. O. (2015). Effect of fair value accounting on asset valuation in public limited companies (A study of petroleum companies in Nigeria), Journal of Accounting and Financial Management, 1 (5), 111-126.
[4]	Chen, J. (2019). Market value, available at https//www.investopedia.com>terms, assessed on Sept. 22, 2019.
[5]	Kenton, W. (2019). Depreciation, available at https://www.investopedia.com/terms/d/depreciation.asp retrieved on September, 2019.
[6]	Elfaki, A. A. A. & Hammad, S. M. E. (2015). The impact of the application of fair value accounting on the quality of accounting information: An empirical study on a group of companies listed on the Khartoum Stock Exchange, International Journal of Academic Research in Accounting, Finance and Management Sciences, 5 (1), 148–160.
[7]	Barth, M. E. (1993). Fair value accounting: Evidence from investment securities and the market valuation of banks, The Accounting Review, 69 (2), 1-25.
[8]	Akwu, O. D. (2014). Examination of fair value measurement in determination of profitability of listed manufacturing firms in Nigeria. A dissertation presented to the department of accountancy, faculty of business administration, university of Nigeria, Enugu campus, in partial fulfillment of the requirements for the award of Master of Science (M. Sc) Degree in Accountancy, Sept., 2014.
[9]	Ibrahim, M. (2016). Effect of earnings quality properties on share price of listed manufacturing firms in Nigeria, A thesis submitted to the School of Postgraduate Studies, Ahmadu Bello University, Zaria, in partial fulfillment of the requirements for the award of the Degree of Doctor of Philosophy (Ph. D) in Accounting and Finance.
[10]	Okolie, A. O. (2014). Audit firm size and market price per share of quoted companies in Nigeria, International Journal of Business and Social Research (IJBSR), 4 (5), 100-117.
[11]	Alade, M. E. (2018). Effect of international financial reporting standards adoption on value relevance of accounting information of Nigerian listed firms. A thesis submitted in partial fulfilment for the degree of Doctor of Philosophy in Accounting in the Jomo Kenyatta University of Agriculture and Technology, Kenya.
[12]	Kip, A. (2009). The effect of fair value accounting on the earnings response coefficient, AMaster thesis presented to Department of Accountancy, Faculty Economics and Business University of Amsterdam, Dec. 2009.
[13]	Ezejiofor, R. A. (2018). Effect of IFRS on value relevance of Accounting Information: Evidence from quoted manufacturing firms in Nigeria, International Journal of Trend in Scientific Research and Development (IJTSRD), 2 (5), 2255-2201.
[14]	Ugwunta, D. O. & Ugwuanyi, B. U. (2019). Accounting conservatism and performance of Nigerian consumer goods firms: An examination of the role of accruals, International Journal of Financial Research, 10 (1), 1-9.
[15]	Okafor, T. G., Ogbuehi, A., & Anene, N. O. (2017). IFRS Adoption and the Value Relevance of Accounting Information in Nigeria: An Empirical Study, Journal of Modern Accounting and Auditing, 13 (10), 421-434, doi: 10.17265/1548-6583/2017.10.001.

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Ubesie Madubuko Cyril, Akparhuere Godwin Oghenekohwo, Mba Chris Chukwuemeka. (2019). Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria. Science Journal of Business and Management, 7(6), 150-158. https://doi.org/10.11648/j.sjbm.20190706.13

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ACS Style

Ubesie Madubuko Cyril; Akparhuere Godwin Oghenekohwo; Mba Chris Chukwuemeka. Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria. Sci. J. Bus. Manag. 2019, 7(6), 150-158. doi: 10.11648/j.sjbm.20190706.13

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AMA Style

Ubesie Madubuko Cyril, Akparhuere Godwin Oghenekohwo, Mba Chris Chukwuemeka. Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria. Sci J Bus Manag. 2019;7(6):150-158. doi: 10.11648/j.sjbm.20190706.13

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@article{10.11648/j.sjbm.20190706.13,
  author = {Ubesie Madubuko Cyril and Akparhuere Godwin Oghenekohwo and Mba Chris Chukwuemeka},
  title = {Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria},
  journal = {Science Journal of Business and Management},
  volume = {7},
  number = {6},
  pages = {150-158},
  doi = {10.11648/j.sjbm.20190706.13},
  url = {https://doi.org/10.11648/j.sjbm.20190706.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20190706.13},
  abstract = {Fair value of a firm’s asset is one of the determinants of its net-worth and marketability. It is a rational and unbiased estimate of the potential market price of a good (commodity), stock, service or asset of a firm. The main objective of the study is to determine the effect of fair value accounting on assets of consumer goods manufacturing companies in Nigeria. The study adopted ex-post facto research design and data were sourced from three selected companies through purposive sampling technique. Analysis was carried out on ten years pooled data on total assets (the dependent variable), fair value (proxy by share value), market value (proxy by Net Assets), and depreciation value. The findings show that fair value has significant effect on assets of consumer goods firms in Nigeria. The study recommends that management of consumer goods companies should consolidate on improvement of fair value of firms through their assets management and appropriate policies, adopt the best practices that would raise the share prices and maintain higher book values of the firms, and use depreciation as a source of replacement of old assets thereby stabilizing the Net worth of the firms.},
 year = {2019}
}

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TY  - JOUR
T1  - Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria
AU  - Ubesie Madubuko Cyril
AU  - Akparhuere Godwin Oghenekohwo
AU  - Mba Chris Chukwuemeka
Y1  - 2019/12/13
PY  - 2019
N1  - https://doi.org/10.11648/j.sjbm.20190706.13
DO  - 10.11648/j.sjbm.20190706.13
T2  - Science Journal of Business and Management
JF  - Science Journal of Business and Management
JO  - Science Journal of Business and Management
SP  - 150
EP  - 158
PB  - Science Publishing Group
SN  - 2331-0634
UR  - https://doi.org/10.11648/j.sjbm.20190706.13
AB  - Fair value of a firm’s asset is one of the determinants of its net-worth and marketability. It is a rational and unbiased estimate of the potential market price of a good (commodity), stock, service or asset of a firm. The main objective of the study is to determine the effect of fair value accounting on assets of consumer goods manufacturing companies in Nigeria. The study adopted ex-post facto research design and data were sourced from three selected companies through purposive sampling technique. Analysis was carried out on ten years pooled data on total assets (the dependent variable), fair value (proxy by share value), market value (proxy by Net Assets), and depreciation value. The findings show that fair value has significant effect on assets of consumer goods firms in Nigeria. The study recommends that management of consumer goods companies should consolidate on improvement of fair value of firms through their assets management and appropriate policies, adopt the best practices that would raise the share prices and maintain higher book values of the firms, and use depreciation as a source of replacement of old assets thereby stabilizing the Net worth of the firms.
VL  - 7
IS  - 6
ER  -

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Author Information

Ubesie Madubuko Cyril

Department of Accountancy, Enugu State University of Science and Technology (ESUT), Enugu, Nigeria
Akparhuere Godwin Oghenekohwo

Department of Accountancy, Enugu State University of Science and Technology (ESUT), Enugu, Nigeria
Mba Chris Chukwuemeka

Department of Marketing, Enugu State University of Science and Technology (ESUT), Enugu, Nigeria

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APA Style

Ubesie Madubuko Cyril, Akparhuere Godwin Oghenekohwo, Mba Chris Chukwuemeka. (2019). Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria. Science Journal of Business and Management, 7(6), 150-158. https://doi.org/10.11648/j.sjbm.20190706.13

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ACS Style

Ubesie Madubuko Cyril; Akparhuere Godwin Oghenekohwo; Mba Chris Chukwuemeka. Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria. Sci. J. Bus. Manag. 2019, 7(6), 150-158. doi: 10.11648/j.sjbm.20190706.13

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AMA Style

Ubesie Madubuko Cyril, Akparhuere Godwin Oghenekohwo, Mba Chris Chukwuemeka. Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria. Sci J Bus Manag. 2019;7(6):150-158. doi: 10.11648/j.sjbm.20190706.13

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@article{10.11648/j.sjbm.20190706.13,
  author = {Ubesie Madubuko Cyril and Akparhuere Godwin Oghenekohwo and Mba Chris Chukwuemeka},
  title = {Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria},
  journal = {Science Journal of Business and Management},
  volume = {7},
  number = {6},
  pages = {150-158},
  doi = {10.11648/j.sjbm.20190706.13},
  url = {https://doi.org/10.11648/j.sjbm.20190706.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20190706.13},
  abstract = {Fair value of a firm’s asset is one of the determinants of its net-worth and marketability. It is a rational and unbiased estimate of the potential market price of a good (commodity), stock, service or asset of a firm. The main objective of the study is to determine the effect of fair value accounting on assets of consumer goods manufacturing companies in Nigeria. The study adopted ex-post facto research design and data were sourced from three selected companies through purposive sampling technique. Analysis was carried out on ten years pooled data on total assets (the dependent variable), fair value (proxy by share value), market value (proxy by Net Assets), and depreciation value. The findings show that fair value has significant effect on assets of consumer goods firms in Nigeria. The study recommends that management of consumer goods companies should consolidate on improvement of fair value of firms through their assets management and appropriate policies, adopt the best practices that would raise the share prices and maintain higher book values of the firms, and use depreciation as a source of replacement of old assets thereby stabilizing the Net worth of the firms.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria
AU  - Ubesie Madubuko Cyril
AU  - Akparhuere Godwin Oghenekohwo
AU  - Mba Chris Chukwuemeka
Y1  - 2019/12/13
PY  - 2019
N1  - https://doi.org/10.11648/j.sjbm.20190706.13
DO  - 10.11648/j.sjbm.20190706.13
T2  - Science Journal of Business and Management
JF  - Science Journal of Business and Management
JO  - Science Journal of Business and Management
SP  - 150
EP  - 158
PB  - Science Publishing Group
SN  - 2331-0634
UR  - https://doi.org/10.11648/j.sjbm.20190706.13
AB  - Fair value of a firm’s asset is one of the determinants of its net-worth and marketability. It is a rational and unbiased estimate of the potential market price of a good (commodity), stock, service or asset of a firm. The main objective of the study is to determine the effect of fair value accounting on assets of consumer goods manufacturing companies in Nigeria. The study adopted ex-post facto research design and data were sourced from three selected companies through purposive sampling technique. Analysis was carried out on ten years pooled data on total assets (the dependent variable), fair value (proxy by share value), market value (proxy by Net Assets), and depreciation value. The findings show that fair value has significant effect on assets of consumer goods firms in Nigeria. The study recommends that management of consumer goods companies should consolidate on improvement of fair value of firms through their assets management and appropriate policies, adopt the best practices that would raise the share prices and maintain higher book values of the firms, and use depreciation as a source of replacement of old assets thereby stabilizing the Net worth of the firms.
VL  - 7
IS  - 6
ER  -

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