Review of International Accounting Standard 36(impairment of assets) in relation to property, plant and equipment

This paper addressed the issue of creation of secret reserve as a result of provision for impairment vis-a-vis recognition of item of Property, Plant and Equipment (PPE) in the financial statements. The main objective of this paper is to develop theory that impairment of assets as provided in IAS 36 would distort information presented in the financial statement. According to postulate of accounting, historical cost is the appropriate basis for initial accounting recognition of all assets acquisition and the cost value should be retained throughout the accounting process. To match the cost of using the assets to the income derived in an accounting year, provision is made for depreciation to account for the usage of the asset. Before the promulgation of IAS 36, fixed assets (non-current assets) net book value is the amount at which assets are recognized after deducting provision for depreciation from the cost of assets. However, upon promulgation of IAS 36, assets are recognized at carrying amount which is historical cost of the asset minus accumulated depreciation and accumulated impairment losses thereon. The complication and complexity involved in the determination of impairment such as identification of the assets that may be impaired, calculation of recoverable amount, value in use and determination of a cash generating unit have made it to be subjective and may not allow for fair representation of the information presented in the financial statement contrary to the provision of IAS

The Level of Internet Adoption in Business Reporting: The Nigerian Perspectives

In recent years, a paradigm shift has occurred regarding the way firms report their activities. Instead of using the traditional approach, otherwise called paper-based reporting, the trend has switched into the use of a more sophisticated approach referred to as internet or web-based reporting. This study examines the extent of internet implementation in business reporting by emphasizing on the listed manufacturing companies in Nigeria. For the purpose of this study, all manufacturing companies listed on the Nigerian Stock Exchange constitute the population. The purposive sampling procedure was employed to select forty-five out of ninety listed companies. Primary data were obtained from a thematic questionnaire that uses validated scales. The data collected were analyzed using both descriptive and inferential statistics. Specifically, Principal Component Analysis (PCA) was the inferential statistic used to evaluate the extent to which manufacturing companies employ the internet in reporting their financial and non-financial activities. The results show that the listed manufacturing companies are at the exploratory stage. The internet is employed either as an extension activity or enrichment exercise to the hard copy business reporting model. This study offers a guide to stakeholders of the listed manufacturing companies to enhance their competitive advantage by employing technology in reporting their activities

The Impact of Macroeconomic Variables on All Share Index on the Nigerian Stock Exchange

The study examined the impact of macroeconomic variables on all  share index on the Nigerian Stock Exchange.The main objective of the study is to examine the impact of macroeconomic variables on all share index on the Nigerian Stock Market. To realize the objective, six hypotheses were formulated. The secondary method of data collection was adopted while all the companies quoted on the Nigerian Stock Exchange was considered for a period of fifteen years(1996-2010). Multiple regression and stationarity and unit root techniques were employed to analyse the data. The result of the correlation showed varying degree of correlation between all share index and macroeconomic variables. The value of R2 IS 0.7513 (75.13%) of All share index is determined by six (6) macroeconomic variables considered in this study while the balance 24.87% is determined by other variables that were not considered in this study. The result from the unit root based on Augmented Dickey Fueller  showed that all the six null hypotheses based on the rule  that if the test statistic < critical value (i.e. less than the negative value) reject Null hypothesis

The Perceptions of Major Stakeholders towards Web-Based Business Reporting in Selected Manufacturing Firms in Nigeria.

The study examined the perceptions of major stakeholders towards web-based reporting among manufacturing firms in Nigeria. The study employed descriptive research design. Structured questionnaire was the instrument used in sourcing primary data. The data was analyzed using descriptive statistics, multiple regression, and analysis of variance (ANOVA). The results showed the that web based reporting is more useful and easier to use and that the more successful companies are those companies that are using web in business reporting. There is a favorable attitude towards web-based reporting and a very high intentions to use web in reporting among the stakeholders. The findings on a coefficient of multiple correlation (R= .646  and R-square of .417) implied that 41.7% of the variance is accounted for by the predictor when taking together. Accordingly, the regression results of the coefficient showed that, only performance expectancy and attitude have a positive and significant influence on the behavioral intentions to use web in reporting. Keywords: Web Based Business Reporting; Major stakeholders; Perceptions

Income Smoothening in Financial Reporting and Theory of Financial Accountability in Nigeria

This paper focused on the theory of financial accountability and how it has helped resolved income smoothening in financial reporting. Financial reporting is the medium through which managers give stewardship on the resources entrusted in their custody. Users of financial information depend heavily on this report to make informed economic decisions. Theory of accountability, agency theory, and stewardship theory and information asymmetry was considered. The exploratory research method was adopted by reviewing existing literatures and case study thereby drawing a conclusion. The study discovered that organizations employed income smoothening for various reasons to avoid earnings fluctuations and enhance organizations performance. This is however carried out with the involvement of managers. He either agrees to manipulate account for the shareholders or manipulate it against them. The study concluded that income smoothing is not illegal or unethical but must be carried out with care to avoid fraudulent practices that may harm the organization in the nearest future. Policies to improve the quality of financial information should be adopted in all organizations. The reward should not be based on the result but other factors should be critically considered. Strong internal control and monitoring should be in place to prevent actions that will be detrimental to the organizations in the nearest future. Keywords: Financial accountability, income smoothing, financial reporting, Case study

INVESTIGATING IMPACT OF OPERATING AND FINANCING ACCOUNTS ON FIRMS PROFITABILITY: A CASE STUDY OF QUOTED FOOD AND BEVERAGES INDUSTRY IN NIGERIA

This study investigate  impact of operating and financing accounts on profitability .The objective of the research presented here is to provide empirical evidence about the impact of operating and financing accounts on the profitability of quoted companies under food and beverages in Nigeria. To realize the objectives of the study; current assets and current liabilities were distilled into current operating assets, current financing asset, current operating liability and current financing liability. With this in mind the whole census of the companies quoted in food and beverages industry was studied covering a period of between 2006 and 2010. Secondary data collected from the annual statements of the companies were used to calculate data for the analysis. The overall significance of the model was evaluated by ANOVA. The results showed that the model is significant with the value of F-statistic =110.86 and Prob(F-statistic) =.00. The multiple regressions were used to overcome the weakness of Product Moment Coefficient of Correlation. The result indicated that operating assets and operating liability are drivers of profitability validating proposition of Fleuriet model

LINKAGE BETWEEN FINANCES OF STATES GOVERNMENT AND REVENUE ALLOCATION IN FEDERAL SYSTEM OF GOVERNMENT: EVIDENCE FROM NIGERIA

This study examined linkage between finances of states government and revenue allocation in federal system of government in sub-Sahara African: Evidence from Nigeria. The study has twin objectives namely; to examine the relationship between states budget and revenue allocation to states and the association between states budget and internally generated revenue by states. Regression analysis was carried out on the data taken from secondary source. The regression results show that there exist positive and significant relationship between State budget and Federation allocation. State budget and internally generated revenue are also related positively and significantly. Further, it was discovered that there exists relationship between state budget and federation allocation which explained the reason why the state government usually waits for the federal government to present her budget to the National Assembly before the states present their budget to the State Assembly. The main policy prescription of this analysis is that the states should try as much as possible to improve internally generated revenue as the State budget and internally generated revenue are linked positively with each other

Strategic Role of Efficiency to Cash Management: Evidence from Cash Flow Statement of Selected Manufacturing Companies in Nigeria

Purpose: The study aims to examine the strategic role of efficiency to cash management, more specifically as it relates to cash generated from operations of manufacturing companies in Nigeria.  Method: Annual cash flow statements of selected manufacturing companies in Nigeria for ten years (2009 -2018) were used to conduct the Pooled Test, Random Test, Fixed Effect, and Hausman Test. Results: The results showed that efficiency has a significant effect on the cash management of manufacturing companies in Nigeria generally coupled with that of the proxies employed (CULC, LTDC, INTC, and EARQ) to measure cash management. Implications: In view of the empirical evidence, the study proffered that cash generated from the operation is very crucial and the most reliable means of generating funds for operation because it is internal; unlike funds generated from investing and financing activities

DOES DEBT IMPACT EQUITY RETURNS?

The study examined whether or not debt impacts equity returns using Nestle Nigeria Plc as a case study because the company has the highest market value per share and capitalization index among the non-finance company quoted on the Nigerian Stock Exchange. The general objective of the study is to examine whether or not debt impacts equity return. Secondary method of data collection was adopted through the annual reports and accounts of the company studied. A quantitative approach was adopted which made the study a scientific one. The existing variables explained 96.6% of Nestle Nigeria Plc, it showed that debt equity is a driver of equity returns. The results of the regression analysis revealed that lowering the debt equity ratio will result in decrease of 0.31, 0.46, 0.18 and an increase of 0.96 on average in return on equity, earning per share,, net asset per share and dividend per share respectively. The results showed that debt equity relationship impact return on equity, earning per share and net asset per share at varying degree at significant level with the exception of dividend per share where the impact is not significant. Out of the four hypotheses only hypothesis three was accepted while the other three were rejected