ACCA SBR ^INT Syllabus E. Interpret Financial Statements For Different Stakeholders - Purpose and content of an integrated report - Notes ^{8 / 12}

It benefits all stakeholders interested in an organisation’s ability to create value over time, including

• employees

• customers

• suppliers

• business partners

• local communities

• legislators

• regulators and policy-makers

Objectives for integrated reporting as defined by the International Integrated Reporting Council (IIRC) include:

1. Provide a more cohesive and efficient approach to corporate reporting that draws on different reporting strands and communicates the full range of factors that materially affect the ability of an organisation to create value over time.

2. Enhance accountability and stewardship for the broad base of capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and promote understanding of their interdependencies.

3. To improve the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital.

The Capitals

These are the resources and the relationships used by the organisation

They are financial, manufactured, intellectual, human, social and relationship, and natural capital. 

However, an integrated report may not cover all capitals – the focus is on capitals that are relevant to the entity

The ‘building blocks’ of an integrated report are:

• Guiding principles

  These underpin the integrated report

  They guide the content of the report and how it is presented

  < IR > does NOT provide a prescribed format, instead it gives guidance on the content

• Content elements

  These are the key categories of information and include performance, business model, and governance.

Guiding Principles

1. Are you showing an insight into the future strategy..?

2. Are you showing a holistic picture of the organisation's ability to create value over time?

   Look at the combination, inter-relatedness and dependencies between the factors that affect this.

3. Are you showing the quality of your stakeholder relationships?

4. Are you disclosing information about matters that materially affect your ability to create value over the short, medium and long term?

5. Are you being concise? 

   Not being burdened by less relevant information.

6. Are you showing Reliability, completeness, consistency and comparability when showing your own ability to create value?

   The report is prepared on a consistent basis from one year to another.

7. Is the issue material? If so disclose it.

Content Elements

1. Organisational overview and external environment
    
   What does the organisation do and what are the circumstances under which it operates?

2. Governance

   How does an organisation’s governance structure support its ability to create value in the short, medium and long term?

3. Business model

   What is the organisation’s business model?

4. Risks and opportunities

   What are the specific risk and opportunities that affect the organisation’s ability to create value over the short, medium and long term? And how is the organisation dealing with them?

5. Strategy and resource allocation

   Where does the organisation want to go and how does it intend to get there?

6. Performance

   To what extent has the organisation achieved its strategic objectives for the period and what are its outcomes in terms of effects on the capitals?

7. Outlook

   What challenges and uncertainties is the organisation likely to encounter in pursuing its strategy, and what are the potential implications for its business model and future performance?