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Abstract

Starting 2012, Nigerian listed companies are mandated to follow International Financial Reporting Standards in reporting of firm financial information. The reporting framework requires companies to report fair value gain and losses as other comprehensive income. In this study, we investigate the value relevance of other comprehensive income and compliance with International Accounting Standards (IAS) 16, IAS 19 and IFRS 7. Using 259 firm-year observations, the result shows that compliance with relevant accounting standards are positively priced by investors. One primary recommendation of the study is that reporting entities should pursue compliance of IFRS standards in order to increase reliability of financial reporting process for investors.

Keywords: compliance, accounting standards, other comprehensive income, value relevance, Nigeria.

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