The effect of fair market value to innovative decision-making (An applied study in a sample of banks listed in the Iraq Stock Exchange)

Abstract

Economic conditions are characterized by dynamic, ever-changing and fluctuating movement, and the purchasing power of the monetary unit changes with the change of these conditions in different cases. Therefore, the financial statements according to the historical cost became insufficient to show the financial situation, business results, cash flows, and a description of the economic facts of the economic unit, which almost lost this the data is important, given that the financial information in it is not based on economic data related to financial instruments (financial assets). As a result, it was necessary for accounting to search for a better alternative that fits and changes these conditions. From here, the fair market value appeared that helps economic decision-makers in evaluating the financial position. And actions carried out by economic units, and the importance of disclosure has increased as a result of the issuance of legislation to guarantee the rights of current and prospective investors. Therefore, disclosure should be sufficient for the fair market value so that it is appropriate for current and prospective investors, as there are several methods of disclosure, and the method of notes and attached tables will be chosen. And users of financial information ask about the extent to which they can rely and trust this information, as many of them have become aware that financial information is based on concepts and principles that may be tainted by many defects and estimates, which make it less reliable, so they have tended to use the fair market value.