The research aims to clarify the conceptual framework of asset impairment according to International Accounting Standard No. 36 (IAS 36) and state the role of accounting disclosure as a tool to improve the qualitative characteristics and quality of financial reports. It also aims to apply IAS 36 practically to the Kufa Cement Factory and measure the impact of recognizing impairment losses on financial performance indicators (before and after adjustment), and prepare financial reports related to asset impairment according to IAS 36 and the level of accompanying accounting disclosure and its impact on financial performance and the quality of financial reports. This is in light of the rapid transformations in the contemporary business environment that require economic units to adapt to international accounting standards to ensure the provision of transparent and reliable financial information.
The quantitative analytical case study approach was utilized in the Kufa Cement Factory for the period (2023-2024) to meet the research objectives. One of the most noteworthy conclusions reached by the research is that the precise application of the requirements of the standard and the accompanying accounting disclosure led to the recognition of a loss in the value of assets exceeding 256 million Iraqi dinars. The investigation showed that despite the immediate negative effect of this loss on profitability indicators, there was a positive corrective effect. The indicators of asset management efficiency improved significantly (34%), and the operating revenue capability improved by 14%. The recognition of an asset impairment and the appropriate disclosure with it are not just formal accounting procedures but they are important tools for reducing the earnings management practices and improving the qualitative characteristics of accounting information, in particular the qualities of faithful representation and relevance. This contributes to enhancing the quality of financial reporting, and better reflects the genuine financial performance of economic organizations.