Firm Size and IFRS 9 Derivative Recognition: A Multi-Country Empirical Analysis of African Banks
This study examines how multidimensional firm size influences IFRS 9 derivative recognition across seventy-three listed banks in Africa. Using panel data from 2012 to 2023 and applying Driscoll–Kraay estimators, the analysis evaluates the effects of asset size, revenue size and human-resource size on derivative asset intensity, derivative liability intensity and net derivative asset ratios. The results show that firm size affects derivative liabilities but not derivative assets or net derivative positions. Asset size increases derivative liabilities, while revenue size reduces them, reflecting differences in hedging activity and internal liquidity strength. Human-resource size has no significant influence, indicating that technical capacity alone does not overcome valuation constraints in shallow markets. Macroeconomic variables, particularly inflation, consistently shape derivative recognition, underscoring the sensitivity of IFRS 9 fair value outcomes to external volatility. The findings align with prior evidence on the challenges of derivative valuation in emerging markets and highlight the contextual limits of signalling effects predicted by theory. The study contributes to the literature by demonstrating that firm size influences IFRS 9 derivative reporting asymmetrically and that institutional environments remain decisive in shaping recognition quality across African banking systems. Keywords: IFRS 9, derivative recognition, asset, firm size, revenue, human resource, African banks
Keywords: IFRS 9, derivative recognition, asset firm size, revenue firm size, human resource firm size, African banks
Citation: Akinadewo, J.O., Akinadewo, I.S., Oluwagbade, O.I., & Jabar, A.A. (2025). Firm Size and IFRS 9 Derivative Recognition: A Multi-Country Empirical Analysis of African Banks. International Journal of Innovative Research in Accounting and Sustainability, 10(4), 1-17.