Applying IFRS3 Business Combinations in the Iraqi Environment (Requirements and Challenges)

Abstract

Following the guidance of the Federal Financial Control Bureau as an independent body that monitors public and mixed funds, the self-financed integrated institutions adopt IFRS 3 as a basis for mergers as it provides more appropriate information about these companies. In light of this, the questions of the research were conducted in two axes: the first is the availability of conditions for the application of criterion (3) in the Iraqi industrial companies (a self-financed public sector)? Second, what are the potential challenges that these companies face when applying IFRS 3 Business Combinations, The main objective of the research was to identify the requirements and challenges of applying the IFRS 3, to assemble businesses in self-financed companies in the Iraqi environment, The main findings of the study were: The most important requirement for the application of IFRS 3 is the assessment of assets and liabilities at fair value, which are subject to the availability of active markets and are not currently available in the Iraqi environment. One of the recommendations of the research is that it is possible to rely on the present value of future cash flows instead of the fair value of the assets and liabilities of the integrated Iraqi companies for the purposes of evaluation and comparison at the date of the merger and therefore determine goodwill.