Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria

Abimbola Abosede Joshua; Olubunmi Alao; Rafiu Oyesola Salawu; Oludele Emmanuel Ige

doi:doi:10.11648/j.ijafrm.20230804.13

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Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria

Abimbola Abosede Joshua, Olubunmi Alao, Rafiu Oyesola Salawu, Oludele Emmanuel Ige

Published in International Journal of Accounting, Finance and Risk Management (Volume 8, Issue 4)

Received: 3 October 2023 Accepted: 6 November 2023 Published: 29 November 2023

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Abstract

The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sample size. The study covered the period of eleven years (2010-2020). The independent variable includes the recognition of assets impairment proxied by 1 if recognised and 0 if otherwise while the dependent variable includes the real activities of earnings management proxied by operational abnormal cashflows with the control variables such as the firms’ size, firms age and ROA. Data were extracted from the financial report of the companies under consideration and analysed using the panel least square of regression analysis with the aid of E-views statistical tool. The findings of the study revealed a positive but insignificant effect of assets impairment disclosure on the real earnings management with coefficient value of 0.178012, t = 0.345786, p-value = 0.7298 > 0.05. Firms’ size indicated a negative and insignificant effect with r = -0.046184, t = -0.466285 and p-value = 0.6414 > 0.05. Firms’ age indicated also a negative and statistically insignificant effect with r = -0.017032, t = -0.02232 and p-value = 0.9822 > 0.05 while ROA indicated a positive and statistically significant effect at r = 0.0422, t = 2.2809 and p-value = 0.0233 < 0.05. The study recommended that accounting standards should be reviewed and updated so as to give a lesser opportunity for income smoothing and thereby enhance quality financial reporting system.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 8, Issue 4)
DOI	10.11648/j.ijafrm.20230804.13
Page(s)	104-112
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Impairment Losses, Earnings Management, Earnings Quality, Positive Accounting Theory, Accounting Standards

References

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APA Style

Abosede Joshua, A., Alao, O., Oyesola Salawu, R., Emmanuel Ige, O. (2023). Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria. International Journal of Accounting, Finance and Risk Management, 8(4), 104-112. https://doi.org/10.11648/j.ijafrm.20230804.13

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ACS Style

Abosede Joshua, A.; Alao, O.; Oyesola Salawu, R.; Emmanuel Ige, O. Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria. Int. J. Account. Finance Risk Manag. 2023, 8(4), 104-112. doi: 10.11648/j.ijafrm.20230804.13

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AMA Style

Abosede Joshua A, Alao O, Oyesola Salawu R, Emmanuel Ige O. Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria. Int J Account Finance Risk Manag. 2023;8(4):104-112. doi: 10.11648/j.ijafrm.20230804.13

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@article{10.11648/j.ijafrm.20230804.13,
  author = {Abimbola Abosede Joshua and Olubunmi Alao and Rafiu Oyesola Salawu and Oludele Emmanuel Ige},
  title = {Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {8},
  number = {4},
  pages = {104-112},
  doi = {10.11648/j.ijafrm.20230804.13},
  url = {https://doi.org/10.11648/j.ijafrm.20230804.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20230804.13},
  abstract = {The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sample size. The study covered the period of eleven years (2010-2020). The independent variable includes the recognition of assets impairment proxied by 1 if recognised and 0 if otherwise while the dependent variable includes the real activities of earnings management proxied by operational abnormal cashflows with the control variables such as the firms’ size, firms age and ROA. Data were extracted from the financial report of the companies under consideration and analysed using the panel least square of regression analysis with the aid of E-views statistical tool. The findings of the study revealed a positive but insignificant effect of assets impairment disclosure on the real earnings management with coefficient value of 0.178012, t = 0.345786, p-value = 0.7298 > 0.05. Firms’ size indicated a negative and insignificant effect with r = -0.046184, t = -0.466285 and p-value = 0.6414 > 0.05. Firms’ age indicated also a negative and statistically insignificant effect with r = -0.017032, t = -0.02232 and p-value = 0.9822 > 0.05 while ROA indicated a positive and statistically significant effect at r = 0.0422, t = 2.2809 and p-value = 0.0233 < 0.05. The study recommended that accounting standards should be reviewed and updated so as to give a lesser opportunity for income smoothing and thereby enhance quality financial reporting system.
},
 year = {2023}
}

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TY  - JOUR
T1  - Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria
AU  - Abimbola Abosede Joshua
AU  - Olubunmi Alao
AU  - Rafiu Oyesola Salawu
AU  - Oludele Emmanuel Ige
Y1  - 2023/11/29
PY  - 2023
N1  - https://doi.org/10.11648/j.ijafrm.20230804.13
DO  - 10.11648/j.ijafrm.20230804.13
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 104
EP  - 112
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20230804.13
AB  - The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sample size. The study covered the period of eleven years (2010-2020). The independent variable includes the recognition of assets impairment proxied by 1 if recognised and 0 if otherwise while the dependent variable includes the real activities of earnings management proxied by operational abnormal cashflows with the control variables such as the firms’ size, firms age and ROA. Data were extracted from the financial report of the companies under consideration and analysed using the panel least square of regression analysis with the aid of E-views statistical tool. The findings of the study revealed a positive but insignificant effect of assets impairment disclosure on the real earnings management with coefficient value of 0.178012, t = 0.345786, p-value = 0.7298 > 0.05. Firms’ size indicated a negative and insignificant effect with r = -0.046184, t = -0.466285 and p-value = 0.6414 > 0.05. Firms’ age indicated also a negative and statistically insignificant effect with r = -0.017032, t = -0.02232 and p-value = 0.9822 > 0.05 while ROA indicated a positive and statistically significant effect at r = 0.0422, t = 2.2809 and p-value = 0.0233 < 0.05. The study recommended that accounting standards should be reviewed and updated so as to give a lesser opportunity for income smoothing and thereby enhance quality financial reporting system.

VL  - 8
IS  - 4
ER  -

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Author Information

Abimbola Abosede Joshua

Department of Accounting, Mountain Top University, Makogi Oba, Nigeria

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Olubunmi Alao

Department of Accounting, Babcock University, Ilishan Remo, Nigeria

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Rafiu Oyesola Salawu

Department of Accounting, Obafemi Awolowo University, Ile-Ife, Nigeria

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Oludele Emmanuel Ige

Department of Accounting, Babcock University, Ilishan Remo, Nigeria

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APA Style

Abosede Joshua, A., Alao, O., Oyesola Salawu, R., Emmanuel Ige, O. (2023). Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria. International Journal of Accounting, Finance and Risk Management, 8(4), 104-112. https://doi.org/10.11648/j.ijafrm.20230804.13

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ACS Style

Abosede Joshua, A.; Alao, O.; Oyesola Salawu, R.; Emmanuel Ige, O. Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria. Int. J. Account. Finance Risk Manag. 2023, 8(4), 104-112. doi: 10.11648/j.ijafrm.20230804.13

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AMA Style

Abosede Joshua A, Alao O, Oyesola Salawu R, Emmanuel Ige O. Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria. Int J Account Finance Risk Manag. 2023;8(4):104-112. doi: 10.11648/j.ijafrm.20230804.13

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@article{10.11648/j.ijafrm.20230804.13,
  author = {Abimbola Abosede Joshua and Olubunmi Alao and Rafiu Oyesola Salawu and Oludele Emmanuel Ige},
  title = {Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {8},
  number = {4},
  pages = {104-112},
  doi = {10.11648/j.ijafrm.20230804.13},
  url = {https://doi.org/10.11648/j.ijafrm.20230804.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20230804.13},
  abstract = {The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sample size. The study covered the period of eleven years (2010-2020). The independent variable includes the recognition of assets impairment proxied by 1 if recognised and 0 if otherwise while the dependent variable includes the real activities of earnings management proxied by operational abnormal cashflows with the control variables such as the firms’ size, firms age and ROA. Data were extracted from the financial report of the companies under consideration and analysed using the panel least square of regression analysis with the aid of E-views statistical tool. The findings of the study revealed a positive but insignificant effect of assets impairment disclosure on the real earnings management with coefficient value of 0.178012, t = 0.345786, p-value = 0.7298 > 0.05. Firms’ size indicated a negative and insignificant effect with r = -0.046184, t = -0.466285 and p-value = 0.6414 > 0.05. Firms’ age indicated also a negative and statistically insignificant effect with r = -0.017032, t = -0.02232 and p-value = 0.9822 > 0.05 while ROA indicated a positive and statistically significant effect at r = 0.0422, t = 2.2809 and p-value = 0.0233 < 0.05. The study recommended that accounting standards should be reviewed and updated so as to give a lesser opportunity for income smoothing and thereby enhance quality financial reporting system.
},
 year = {2023}
}

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TY  - JOUR
T1  - Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria
AU  - Abimbola Abosede Joshua
AU  - Olubunmi Alao
AU  - Rafiu Oyesola Salawu
AU  - Oludele Emmanuel Ige
Y1  - 2023/11/29
PY  - 2023
N1  - https://doi.org/10.11648/j.ijafrm.20230804.13
DO  - 10.11648/j.ijafrm.20230804.13
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 104
EP  - 112
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20230804.13
AB  - The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sample size. The study covered the period of eleven years (2010-2020). The independent variable includes the recognition of assets impairment proxied by 1 if recognised and 0 if otherwise while the dependent variable includes the real activities of earnings management proxied by operational abnormal cashflows with the control variables such as the firms’ size, firms age and ROA. Data were extracted from the financial report of the companies under consideration and analysed using the panel least square of regression analysis with the aid of E-views statistical tool. The findings of the study revealed a positive but insignificant effect of assets impairment disclosure on the real earnings management with coefficient value of 0.178012, t = 0.345786, p-value = 0.7298 > 0.05. Firms’ size indicated a negative and insignificant effect with r = -0.046184, t = -0.466285 and p-value = 0.6414 > 0.05. Firms’ age indicated also a negative and statistically insignificant effect with r = -0.017032, t = -0.02232 and p-value = 0.9822 > 0.05 while ROA indicated a positive and statistically significant effect at r = 0.0422, t = 2.2809 and p-value = 0.0233 < 0.05. The study recommended that accounting standards should be reviewed and updated so as to give a lesser opportunity for income smoothing and thereby enhance quality financial reporting system.

VL  - 8
IS  - 4
ER  -

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