A Comparative Approach to the Impact of IFRS (International Financial Reporting Standards) on the Performance of Banks in Nigeria

ABSTRACT: From January 2012 all public listed firms in Nigeria were mandated to publish their financial report in accordance to IFRS (International financial reporting standard). As a result of this, there have been controversies as to the consequence of this convergence from the Nigerian Generally Acceptable Accounting Principles (NGAAP) to International Financial Reporting Standards (IFRS) on firm’s financial performance and position. This study aims to investigate the impact of IFRS on the performance of banks in Nigeria. A descriptive financial ratio analysis is used to assess and make comparison on the performance of ten sampled banks covering a period of four years (2010 – 2013). The study was carried by comparing the ratios that were calculated from IFRS compliant financial statements and Nigerian GAAP compliant financial statements. Bank’s performance was measured in relation to liquidity, profitability, leverage, and asset quality. An independent t-test was used in testing whether there is a statistical significant difference between the ratios. The result of our analysis revealed no statistically significant difference due to the IFRS adoption. Keywords: IFRS, NGAAP, performance, financial ratios, pre adoption, post adoption. …………………………………………………………………………………………………………………………