Financial Information Disclosure and the Reliability of Fair Value Estimations in Published Financial Statements: Evidence from Real Estate Sector in Nigeria
Journal Title: Asian Journal of Economics, Business and Accounting - Year 2017, Vol 5, Issue 1
Abstract
The inadequacy of historical cost measurement has been unto capture current market information and conditions have given rise to the increased use of fair value measurement. However, there has been a controversy as to whether Fair Value Accounting actually satisfies this need it purports to in respect of necessary conditions and benefits for its usage. The study specifically analyzed the reliability of fair value estimations in financial statement disclosures and the availability of active markets for fair value allocation. The respondents consisted of professional accountants in business and public practice and academics in Anambra State. The study was anchored upon the efficient market hypothesis and the agency theory. Disproportionate stratified random sampling technique was used to select the sample from each stratum; the study used simple random sampling giving the study a sample population of 67 respondents from the target population which was believed to be a good representation of real estate market. Primary data were gathered using unstructured questionnaires while the ANOVA test was employed to analyze the information gathered. The result showed that fair value estimates are not reliable to users of financial information. It was also found that there is low availability of active markets for fair value estimation. The paper concludes that companies should adopt a hybrid form of measurement (measurement should entail both fair and historical values) and provide all necessary information needed to understand the allocation of fair value in the notes to the accounts to improve the reliability of financial information disclosed in published financial statements.
Authors and Affiliations
Ameachi Patrick Egbunike, Abiahu Mary-Fidelis Chidoziem, Sandra Eseoghene Okwuada
Keywords
Related Articles
- EP ID EP338514
- DOI 10.9734/AJEBA/2017/37250
- Views 111
- Downloads 0
Applications of Vose ModelRisk Software in Simulated Data
Statistical simulation is used in cases which there is not enough theoretical background about the method in hand. It is used to derive the performances of inferential methods like empirical estimation of sampling distri...
Green Purchase Intention on Consumer Decision Making towards Green Products
Aims: Growing concerns on environmental friendly products, due to increased environmental issues. Although Green Electronic Product is one of the solutions to save the environment and reduce the pollution in the present...
Effect of the Burnout Syndrome on Intraprenuership: A Practice in Province Ankara
In this study identifying the relation between burnout and intraprenuership was aimed. Additionally, the aim was to reveal the difference between the demographic features and burnout and intraprenuership. In accordance w...
Testing the Validity of McKinnon-Shaw Hypothesis: Empirical Evidence from Nigeria
Ronald McKinnon [1] and Edward Shaw [2] explicate the notion of financial repression noting that Financial liberalization is meant to foster economic growth through increase in savings via an increase in real deposit rat...
The Relationship between Exports and Inflation in Kenya: An Aggregated Econometric Analysis
Aim: This paper tries to identify the relationship between exports and inflation in Kenya: An aggregated econometric analysis. Study Design: The analysis is based on the demand pull theory of inflation and on applied cor...