Effect of Asset Revaluation on Financial Position Reporting of Public Limited Companies in Nigeria

Asset revaluation practices among Nigerian public limited companies have attracted attention as firms increasingly seek to align the carrying values of long-lived assets with current market conditions, yet the financial position implications of such revaluations and their effect on stakeholder perceptions remain inadequately studied in the Nigerian context. This study examined the effect of asset revaluation on financial position reporting among public limited companies listed on the Nigerian Exchange Group, covering the period from 2020 to 2024. The study was anchored on the measurement theory in accounting, which addresses the reliability and representational faithfulness of financial statement values. An ex-post facto research design was adopted, and the population comprised 45 non-financial public limited companies that disclosed asset revaluation activities during the study period. A purposive sample of 30 firms was selected based on data availability. Secondary data were extracted from audited financial statements and annual reports, and analyzed using paired sample t-tests and panel regression. Findings revealed that asset revaluations significantly increased total asset values and equity, thereby improving gearing ratios and net asset per share, while also resulting in increased depreciation charges that reduced reported earnings. The study concluded that asset revaluation materially affects the financial position presentation and has contrasting effects on profitability and solvency indicators. It was recommended that the Financial Reporting Council of Nigeria should issue clearer guidance on revaluation frequency and disclosure requirements to ensure consistency across reporting entities.

Keywords: Asset revaluation, financial position, public limited companies, measurement theory, financial reporting