EFFECTS OF MANDATORY ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARD ON THE FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA.

ABSTRACT The global accounting standards have resulted to a rise in market liquidity, fall in transaction costs for investors, and cost of capital reduction. This study is set out to address the problem that has prompted this research by studying the effects of mandatory adoption of IFRS on the financial performance of Deposit Money Banks in Nigeria. To achieve this objective, an ex-post facto research design was employed in which secondary data were collected from 6 DMBs. The collected data were summarized and analysed in a clear and understandable way using descriptive statistics and numerical approach. While paired sampled t-test was adopted in testing the three formulated hypotheses. From the analysis, it was found that mandatory adoption of IFRS does not significantly impact on the profitability ratios of Deposit Money Banks in Nigeria; mandatory adoption of IFRS does not significantly impact on the liquidity ratios of Deposit Money Banks in Nigeria; and lastly, mandatory adoption of IFRS does not significantly impact on the leverage ratios of Deposit Money Banks in Nigeria. On the basis of these findings, it was concluded that IFRS adoption has positively impacted the overall financial performance and position of banks. Under IFRS, important indicators of financial performance are profitability, liquidity and leverage. Given the fair value perspective of IFRS, its adoption is likely to introduce volatility in income statement and statement of financial position figures. Therefore, the study recommended that Government and the regulators should ensure that there is availability of training facilities and materials for professional accountants on the concept of IFRS and on issues relating to its implementation and conversion.