In 1904, however, all of its members left for the Moderno FC, which was in turn absorbed by Madrid FC, which caused Iberia to disappear from the Madrid scene until an attempt to reactivate it in 1907, the same year in which a new merger with the Sociedad Gimnástica led to its complete disappearance.

[3] Iberia's first-ever line-up was: Rojas, goalkeeper; Jorquera and Valls, defenders; S. Paz, Ramo and Cálvez, midfielders; and Ortega, Martínez, Jiménez, R. Paz, and Alcubilla, forwards; and they rose to the occasion by helping their side to a 5–0 victory, with the chronicles of the time highlighting the performances of Valls, Jorquera and Jiménez, especially the latter, who was "the one who managed to score the majority of the goals".

In the following year, the club once again participated in the Madrid Championship, and again without having much luck either, as they suffered yet another resounding loss, this time to Moncloa FC by 0–4, in the semifinals of the tournament.

[6][7] After the poor sporting results experienced, chaos settled within the entity, and as a result of the disagreements among its members, many of them decided to leave the club in 1904, to join Moderno FC, which also absorbed the Victoria Football Club.

[2] Either way, in 1907, the club was finally absorbed by Sociedad Gimnástica along with players from Moncloa FC, and this time it disappeared definitively.