Integrated Reporting - Statement on Management Accounting

IMA - The Association of Accountants and Financial Professionals in Business / April 2016
George Serafeim

The International Integrated Reporting Council defines integrated reporting as “a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.” An integrated report is “a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.”

Integrated reporting is being adopted by companies around the world but is still considered to be a practice in its early stages. Therefore, it is important to recognize how it has evolved, costs vs. benefits, obstacles hindering a widespread adoption and how they can be overcome, and ways that momentum can be built around integrated reporting implementation. Because integrated reporting is still a new management practice, this Statement on Management Accounting outlines both the guiding principles of integrated reporting and the content elements of an integrated report. Specific examples are provided throughout to illustrate how leading companies are putting the guiding principles into practice and to provide information on the various content elements. Different types of capitals are discussed, and specific examples are provided to illustrate how metrics for these different types of capitals can be constructed. The statement concludes with a discussion of how integrated reporting can be optimized through online technologies and communication practices in conference calls as well as what the future hold

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