• Register
Return to: Home > News > Standards > Accounting groups release background paper on business model reporting

Accounting groups release background paper on business model reporting

The Chartered Institute of Management Accountants (CIMA), the International Federation of Accountants (IFAC) and PwC have released a paper on the business model as key to integrated reporting.

The paper, Business Model, has been published ahead of the International Integrated Reporting Council's (IIRC) International Integrated Reporting Framework, which is due to be released for comment on 16 April.

Against the background of an "inconsistent" business model, "influenced by the presence of regional legislation, corporate governance codes and listing requirements", the paper explores different approaches "with the aim of reaching a common, widely-accepted definition of the business model for use in Integrated Reporting." It also suggests business model reporting content to be presented in the IIRC's proposed framework.

Ian Ball, IFAC principal advisor and chair of the IIRC Working Group, said understanding the business model was "at the centre of integrated reporting", with businesses needing to communicate their business activities, products and services in order to demonstrate the creation of value over time.

Charles Tilley, CIMA chief executive, added that while corporate reports have become "more complex" they now "provide less insight" to investors in terms of value creation.

He said: "Integrated reporting will involve a change in mindset for many organisations as they think about how to better communicate strategy, performance, and prospects.

The paper is supported by PwC research which shows that only 40% of FTSE 350 companies provide insightful data on business models, and only 8% integrate business model reporting with strategy and business risks.

Mark O'Sullivan, director, PwC, contrasted this with 77% of companies that mention business models in their accounts, adding that the information is "critical" for investors to form their views, with the "growing complexity" of business relationships and changing technology increasing demand for insights into such models.

Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.