<![CDATA[General Background High-risk financial assets presented at values detached from economic recoverability compromise financial statement reliability. Specific Background Illiquid accounts receivable lacking active markets rely heavily on valuation estimates and management assumptions. Knowledge Gap However, the combined role of fair value adjustments and structured risk disclosures in mitigating financial misrepresentation remains insufficiently quantified in industrial sector contexts. Aims This study evaluates how integrating fair value measurement with comprehensive disclosure reduces financial misrepresentation risks. Results Empirical analysis of Al-Mansour Company data (2022–2024) demonstrates that a ten percent collection risk discount reduces 2024 pre-tax surplus by 31.2%, while revealing a 75% gap in credit risk disclosures. Novelty An analytical sensitivity model paired with an IFRS-aligned disclosure index is established for high-risk receivables. Implications Combining realistic risk-adjusted valuation with detailed debt aging disclosures prevents misleading financial presentations and enhances reporting transparency. Key Findings Highlights Applying risk-adjusted fair value discounts significantly alters receivables values and reported operating surpluses. Evaluating financial reporting reveals a seventy-five percent disclosure gap regarding high-risk asset collection profiles. Integrating granular risk disclosures with valuation models mitigates incomplete financial position representation. Keywords: Fair Value Measurement, Toxic Assets, Accounting Disclosure, Financial Misrepresentation, Accounts Receivable]]>
