Path of Science: International Electronic Scientific Journal

This study examines the impact of adopting International Financial Reporting Standards (IFRS) on the financial performance metrics of Nigerian deposit money banks. Using an explanatory research design and secondary data from eleven selected banks listed on the Nigerian Stock Exchange, the study analyses profitability (Return on Assets), liquidity (Current Ratio), and leverage (Debt to Equity Ratio) before and after IFRS implementation from 2011 to 2013. Regression analysis results reveal significant differences between Nigerian Generally Accepted Accounting Principles (NNGAAP) and International Financial Reporting Standards (IFRS) reporting frameworks, with the coefficient of determination (R²) increasing substantially from 11% under NNGAAP to 49% under IFRS, indicating improved explanatory power of financial ratios under IFRS. While the relationship between liquidity and profitability remained statistically insignificant, though approaching significance (p=0.0551), leverage demonstrated a statistically significant negative relationship with profitability under IFRS (p=0.0347), which was absent under NNGAAP. The findings suggest that the adoption of IFRS has enhanced financial reporting quality and comparability in the Nigerian banking sector. However, organisations should exercise caution when examining ratio volatility post-IFRS adoption, as it may represent short-term fluctuations rather than long-term trends. The study recommends comprehensive organisational preparation for IFRS implementation, expanded educational campaigns by regulatory authorities, and leveraging IFRS adoption to enhance business processes, promoting standardisation and transparency across operations. 

International Financial Reporting Standards (IFRS); Financial Performance; Deposit Money Banks; Ratio Analysis; Nigerian GAAP

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