An accounting innovation worth commenting on
The International Integrated Reporting Council (IIRC) see http://www.theiirc.org are calling for commentary on a recently released consultation draft paper on Integrated Reporting by the 15th July 2013 – not much time left, but there is still time to comment.
There are many interesting innovations in the draft paper, and one that I find interesting and valuable is around the business model.
At the heart of an organization is its chosen business model. Current business model reporting is inconsistent, both in terms of uptake and scope. Uptake appears to be influenced by the presence of regional legislation, corporate governance codes and listing requirements. Scoping inconsistencies are linked to mixed interpretations of what, exactly, constitutes a business model.
This Background Paper for
A distinction is made between business model disclosures and other information such as:
• external factors or context
• strategy and resource allocation
• opportunities and risks
• future outlook
This framework provides a very interesting perspective on how an organisation creates value through its use of various capitals, and in addition to considering outputs (loosely what an organisation is developing and selling) it also includes outcomes (positive and negative impacts of the business process).
Have a look at the framework and comment by 15th July.
More importantly, review your business in terms of the described business model and think about how this might affect you.
The Business Model