THE EFFECT OF DISCLOSING THE FAIR VALUE ACCORDING TO IFRS7 ON MAXIMIZING THE COMPANY’S VALUE

Аннотация

INTRODUCTION Adopting fair value disclosure affects stock prices, Problem of the Study as when companies adopt fair value disclosure, the Disclosure requirements by the International ratio of the share price (market value of equity) Financial Reporting Standards (IFRS7) enable and book value (book value) approaches. The fair users to assist users of financial statements. value of the property right) means that the fair https://www.theamericanjournals.com/index.php/tajmei 145 THE USA JOURNALS THE AMERICAN JOURNAL OF MANAGEMENT AND ECONOMICS INNOVATIONS (ISSN- 2693-0811) VOLUME 06 ISSUE01 value conveys essential information to decision- faces a challenge in determining its value, so there makers, which is reflected in the share prices of must be a combination of internal and external these companies. The problem of the study can be factors together in achieving the goals that the represented in the following question: company seeks to increase its value. 1-Is there an effect of disclosing the fair value International Financial Reporting Standards IFRS according to (IFRS7) in maximizing the company's Financial reporting is one of the essential topics value? that has received significant attention from Purpose of the study accounting thinkers, as there is agreement on its importance and the necessity of its presence to The research aims to demonstrate the impact of encourage disclosure in financial reports greatly. applying the International Financial Reporting The comparability of global economic companies' Standard (IFRS7) in the Iraqi environment by financial statements and information can be testing the impact of fair value disclosure on improved, as it benefits multinational and large maximizing the company's value in that companies. Comparison and suitability of the environment. issued standards for application in all economic Hypotheses of the Study companies, thus facilitating comparison and The current study relies on the hypothesis derived verification in the financial company. Its from the posed research question. importance has increased with the increase in the number of beneficiaries and users and its ability to 1-There is a statistically significant effect of meet their information needs, in addition to the disclosing the fair value according to IFRS7 on the qualitative characteristics of that information, the company's value maximization credibility and quality of reports, which makes it In Light of the rapid and modern developments in easy to identify capital and the ability to make global business and trade witnessed in the twenty- appropriate administrative and investment first century, international accounting standards decisions at the right time. We will achieve and financial reporting are among the most satisfactory results in this study that will help widespread and applied fields due to the beneficiaries of the financial statements to make acceptance they have received in many countries. appropriate decisions. The importance of this They have also become one of the primary journals study lies in raising the level of disclosure in the that have a role in accounting. Through its ability financial statements and the extent of its impact on to provide financial and non-financial information maximizing the company's value. that helps many prominent parties inside and Many of the studies discussed in this study indicate outside the economic unit to make appropriate the impact of disclosure on the companies and fair decisions, as well as the changes in the Iraqi value. One of the studies conducted by (Zarqat and environment, especially the global business Labaz, 2020) entitled: Risk Management in environment, from the entry of investors, changes Algerian Commercial Banks in Light of the in regulations and laws, and amendments to the Requirements of the International Financial unified accounting system for banks, as All of these Reporting Standard IFRS7 "Financial changes occurred to reach disclosures in financial Instruments." Disclosures," where I used the reports by international financial reporting questionnaire as a study tool on a sample of banks standards. Therefore, it has become clear that it is to study the relationship between risk disclosure consistent with researchers' interest in raising the according to the IFRS7 standard and risk level of exposure in financial statements. Fair value management in banks. I found that risk disclosure measurement assumes that transactions for the impacts the bank's policy in managing these risks sale of assets or settlement of liabilities occur in and that compliance with the requirements of the the primary market. More on the most suitable IFRS7 financial reporting standard is reflected market for selling assets and liabilities, in the Better in the bank. absence of the primary market, and the company https://www.theamericanjournals.com/index.php/tajmei 146 THE USA JOURNALS THE AMERICAN JOURNAL OF MANAGEMENT AND ECONOMICS INNOVATIONS (ISSN- 2693-0