Integrated Reporting - F2 Flashcards
What is integrated reporting?
Process of producing an integrated report.
Single document which is the organisations primary report
What is integrated thinking?
the active consideration by an organisation of the relationships between its various operating and functional units and the capitals that the organisation uses or affects
What is the International Integrated Reporting Council?
Aimed to establish integrated reporting as the norm within mainstream business practice
What is the objective of the IR Framework?
To establish guiding principles and content elements that govern the overall content of an integrated report
To explain the fundamental concepts that underpin integrated reports.
What are the three fundamental concepts underpinning integrated reporting?
Value creation for the organisation and for others
Value creation process
The capitals
What are the six capitals identified in the IR framework?
Financial
Manufactured
Intellectual
Human
Social and Relationship
Nature Capital
What is financial capital?
Pool of funds that is:
Available to an organisation for use in the production of goods or provision of services
Obtained through financing, such as debt, equity or grants, or generated through operations or investments
What is manufactured capital?
Manufactured physical objects that are available to organisation.
e.g buildings, equipment, infrastructure
What is intllectual capital?
Organisational, knowledge-based intangibles.
Intellectual property such as patents, copyrights, software
What is human capital?
People’s compentencies, capabilities and experience and their motivation to innovate
What is social and relationship capital?
The institutions and the relationships within and between communities, groups of stakeholders and other networks, and the ability to share information to enhance individual and collective well-being
What is nature capital?
All renewable and non-renewable environmental resources and processes that provide goods or services.
e.g. water, air, land
What are the benefits of integrated reporting?
Increase in the forward-looking information
Disclosure of new previously undisclosed information increases users understanding
Improved stakeholder reputation due to increased transparency
Integrated thinking may lead to improved efficiencies within organisation
What are the limitations of integrated reporting?
Potential for bias as reports are not required to be audited
Reluctance to disclose information for fear of losing competitive advantage
May provide too much information for users to digest
