Impairment Testing of Intangible Assets and Quality of Financial Reporting of Nigerian Manufacturing Companies

  • Semiu B. Adeyemi University of Lagos
  • Sylvanus I. Omobude University of Lagos
  • Ini E. Udofia University of Lagos
Keywords: Impairment testing, Intangible assets, Financial reporting quality, Impairment loss, Manufacturing company


This study was carried out to investigate impairment testing of intangible assets as it affects the quality of financial reporting in Nigerian manufacturing companies, considering the conflicting interests of managers and owners of corporate firms, as established by the agency theory. Secondary data mainly audited annual reports for two years - 2012 and 2013 of 50 listed manufacturing companies which comprised the sample size for the study, were used and necessary data extracted for analysis. Descriptive and inferential statistics were employed, while the test of hypotheses and other analysis were carried out with the aid of SPSS version 17.0. The test revealed that listed corporate firms in Nigeria are complying with IFRS 3 and IAS 36, IAS 38 on impairment testing except disclosure requirement which has very low compliance rate. The study concludes that the carrying out of this test must be absolute and in full compliance with IFRS and relevant provisions of CAMA 2004, as amended, specifically disclosure requirement provision on impairment losses or gain, because this ensures that annual reports, published by these companies, truly reflect the companies’ net worth and values; since users of such financial information place reliance on them for investment and other purposes which have financial implications. The study recommends that regulatory bodies should more vigorously increase enforcement of compliance with IFRS in the preparation and presentation of annual reports and accounts for improved quality of financial information.


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How to Cite
Adeyemi, S. B., Omobude, S. I., & Udofia, I. E. (2019). Impairment Testing of Intangible Assets and Quality of Financial Reporting of Nigerian Manufacturing Companies. Global Journal of Accounting, 5(1), 1-15. Retrieved from