Measuring Cost-Effectiveness in Light of International Sustainability and Disclosure Standards (IFRS S1–S2): An Applied Study on Iraqi Road Projects

Abstract

Many government construction projects in Iraq face fundamental challenges, reflected in their cost performance and efficiency. This necessitates the urgent need to develop an integrated framework for measuring this efficiency in one of the construction project companies by proposing the application of international sustainability and disclosure standards issued by the International Sustainability Standards Board (ISSB), represented by the two standards (IFRS S1) and (IFRS S2). The research aims to develop an accounting framework for measuring cost-performance efficiency in construction projects through application in one of the government companies in the Iraqi environment, based on the international sustainability and disclosure standards (IFRS S1) and (IFRS S2).

The research relies on the analysis of actual data from Iraqi road projects, employing a set of internationally recognized performance indicators such as the Cost Efficiency Index (CPI) and the Schedule Efficiency Index (SPI) according to ISO 21508, in addition to operational sustainability indicators (SCEI, WOR, RER) derived from the IFRS S1–S2 sustainability disclosure standards and the Sustainable Accounting Framework issued by the International Federation of Accountants (IFAC, 2022). This research applied quantitative analysis using implementation schedules and cost data to assess the alignment between cost and time performance and operational sustainability of projects. The results indicate that integrating sustainability indicators into cost accounting systems enhances the accuracy of financial and time performance evaluations and increases transparency in disclosing the efficiency of public spending, aligning with the governance and environmental responsibility requirements of projects. The research recommends adopting an integrated accounting model that uses cost and time performance indicators and International Financial Reporting Standards (IFRS S1–S2) as the basis for financial performance reporting for government projects in Iraq.