EFFECT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ON FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

This study investigates the effect of International Financial Reporting Standards (IFRS) adoption on the
financial performance of listed consumer goods firms in Nigeria between 2010 and 2025. An ex-post
facto research design was adopted, using audited financial statements from nine firms and generating
160 firm-year observations. Financial performance was evaluated using liquidity and leverage measures,
while IFRS adoption was represented by a dummy variable, assigning 0 to the pre-IFRS period (2010–
2011) and 1 to the post-IFRS period (2012–2025). Panel regression based on the random-effects model
was employed after diagnostic tests for multicollinearity, heteroskedasticity, serial correlation, normality,
and model specification. The findings revealed substantial differences between the pre- and post-IFRS
reporting periods. Under the Nigerian Generally Accepted Accounting Principles (NGAAP), reporting
practices had no significant effect on liquidity (coefficient = −0.023; p = 0.718) or leverage (coefficient
= 0.015; p = 0.786), with low explanatory power across the models. Conversely, IFRS adoption
significantly improved financial performance. Liquidity increased significantly (coefficient = 0.262; p =
0.003), while leverage declined significantly (coefficient = −0.198; p = 0.010), suggesting improved asset
classification, liability recognition, transparency, and reduced information asymmetry. The models
recorded R-squared values ranging from 0.33 to 0.50, indicating moderate explanatory power. The
Hausman test (p = 0.621) supported the random-effects specification. The study concludes that IFRS
adoption enhances financial reporting quality and contributes positively to corporate financial
performance in Nigeria. It recommends stronger compliance with IFRS requirements, particularly
regarding asset valuation, inventory recognition, and receivables disclosure.