ACCOUNTING MEASUREMENT OF TOXIC ASSETS IN LIGHT OF INTERNATIONAL STANDARDS AND ITS IMPACT ON THE QUALITY OF FINANCIAL STATEMENTS (MEASURING CREDIT INSTRUMENTS IN A SAMPLE OF JOINT-STOCK BANKS IN IRAQ)

Abstract

This research aims to highlight one of the most important financial statement tools: toxic assets. It also seeks to determine their risk level by measuring credit risk, a significant problem resulting from successive financial crises. The study examines how the accounting measurement of toxic assets contributes to the quality of financial reports and, consequently, to investment decisions by identifying appropriate measurement methods. This was applied in the Iraq Stock Exchange, with a sample of five banks, over a period from 2018 to 2025, resulting in eight observations per bank and a total of 40 observations. The findings indicate that most Iraqi banks do not properly measure toxic assets, making it difficult to assess their risk. This, in turn, affects the presentation of data in published financial statements and exacerbates the crisis of confidence in financial reporting. Therefore, one of the most important recommendations of this research is to urge and encourage banks to adopt clear and explicit accounting measurement methods for toxic assets, ensuring their disclosure in an appropriate manner.