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DEMO DEMO DEMO INTEGRATED DEMO

REPORTING
A Value Creation Process

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DEMO DEMO DEMO DEMO

LECTURE
R DR. Mara Ridhuan Bin Che Abdul
Rahman
PRESENTEDBY
Iskandar Tony Bin Jovini (GA03725)

EPPA4123ACCOUNTINGTHEORYANDPRACTICE
PDF-XChange Editor PDF-XChange Editor PDF-XChange Editor OUTLINE
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DEMO DEMO DEMO DEMO
PART1 – INTRODUCTION
1.1. About the IIRC
1.2. The evolution of Reporting
1.3. Defined of <IR>
1.4. Objectives of <IR>
1.5. Purpose and Users of <IR>
1.6. Approach of <IR>

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Editor PDF-XChange Editor
DEMO DEMO REPORT 2.1. Using the <IR>
DEMO
Framework
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2.3. Guiding Principles
2.2. Fundamental Concepts
2.4. Content Elements
2.5. Benefits
2.6. Barriers and Challenges
2.7. Conclusion
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO
The International Integrated
Reporting Council <IIRC>
(integratedreporting.org)

Over 2,500 businesses in more than 75

About the IIRC countries are implementing integrated
A global coalition of regulators, reporting (as of Jan’2021)
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investors, companies, standard
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setters, the accounting profession, International <IR> Framework was
academia and NGOs . released December 9, 2013..
The International <IR> Framework (January 2021) supersedes the
International <IR> Framework (December 2013).
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO
The evolution of
Reporting….

1960 1980 2000 2020

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DEMO DEMO DEMO DEMO

…Integrated
Reporting– the
Future
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO

DEFINED:

Organisation’s
strategy, Creation of value
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ContextEditor
of its PDF-XChange Editor
DEMO A concise DEMO governance, DEMO
- short, medium
DEMO
&
performance & external long term
communication
prospects environment
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO

OBJECTIVES:

Better
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Editor Accountability
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DEMO DEMO Different factorsDEMO stewardship DEMO
of capital Value
affecting value creation
creation
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO

PURPOSE AND USERS

WHO ARE INTEGRATED REPORTS FOR?

Purpose Target stakeholders (users)

The primary purpose of an integrated • Shareholders, investors & analysts
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reportEditor PDF-XChange
is to explain Editor
to providers • Current
of PDF-XChange & prospectivePDF-XChange
Editor employees Editor
DEMO financial capital DEMO
how an organizationDEMO • Customers & consumers DEMO
• Suppliers & business partners
creates value over time.
• Local communities
• Non-government organizations (NGOs)
• Legislators, regulators and policy makers
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO
FRAMEWORK
Objective of the <IR> Framework

Establish Guiding Principles and Written primarily in the context of

Content Elements private sector, for-profit
companies, public sector and not-
for-profit organizations.

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DEMO DEMO DEMO DEMO

Assessing an organization’s ability to In the <IR> Framework, reference

create value. to the creation of value.
PART1 – INTRODUCTION
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DEMO DEMO DEMO DEMO
FRAMEWORK
A principles-based approach

The intent of the principles-based approach is to strike an appropriate balance between flexibility and
prescription that recognizes the wide variation in individual circumstances of different
organizations while enabling a sufficient degree of comparability across organizations to meet
relevant information needs.

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DEMO DEMO
Which matters are How are they DEMO Quantitative and DEMO How it uses and
qualitative affects various
material disclosed?
information capitals
PART 2 – THEINTEGRATED REPORT
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1. Using the <IR> Framework
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FRAMEWORK
Core features

8
Fundamental

37
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Guiding Content
Concepts Principles Element
s
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 1. ValueEditor
PDF-XChange Creation for the
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DEMO DEMO organization and forDEMO
others DEMO
manifests itself in increases, decreases or transformations of
the capitals caused by the organization’s business activities
and outputs.
FRAMEWORK
Core features
2. The Capitals
The stocks of value that are increased, decreased or

3
transformed through the activities and
outputs of the organization.

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DEMO Fundamental DEMO DEMO DEMO
3. The Value Creation Process
Concepts The core of the organization is its business model, which
draws on various capitals as inputs and, through its
business activities, converts them to outputs (products,
services, by-products and waste). The organization’s
business activities and outputs lead to outcomes in terms
of effects on the capitals.
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 1. ValueEditor
PDF-XChange Creation for thePDF-XChange Editor PDF-XChange Editor
DEMO DEMO organization and forDEMO others DEMO
manifests itself in increases, decreases or
transformations of the capitals caused by the
organization’s business activities and
outputs.
FRAMEWOR
K
Core features 2. The Capitals
The stocks of value that are increased,
decreased or transformed through the

3
activities and outputs of the organization.
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DEMO DEMO DEMO DEMO
Fundamental
3. The Value Creation Process
Concepts The core of the organization is its business model, which draws on
various capitals as inputs and, through its business activities, converts
them to outputs (products, services, by-products and waste). The
organization’s business activities and outputs lead to outcomes in
terms of effects on the capitals.
PART 2 – THEINTEGRATEDREPORT
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DEMO DEMO DEMO DEMO

FRAMEWORK
Core features 2. The Capitals

DEMO
3 Fundamental Concepts
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PART 2 – THEINTEGRATEDREPORT
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1. Strategic
PDF-XChange Editor focus and future orientation
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DEMO An integrated reportDEMO
should provide insight into the organization’s strategy,
DEMO
and how it relates to the organization’s ability to create value in the short,
medium and long term and to its use of and effects on the capitals.

FRAMEWOR
K
Core features

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7
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Guiding
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DEMO
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Principles
 2. Connectivity of information
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An integrated reportPDF-XChange
should showEditor
a holistic picturePDF-XChange Editor
of the combination,
DEMO DEMO interrelatedness DEMO
and dependencies DEMO the factors
between
that affect the organization’s ability to create value over time.

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K
Core features

7
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Guiding
DEMO
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Principles
 3. Stakeholder relationships
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An integrated reportPDF-XChange
should provideEditor PDF-XChange
insight into the nature andEditor
quality of
DEMO DEMO the organization’s relationships
DEMO with its key stakeholders, DEMOincluding how and to
what extent the organization understands, takes into account and responds
to their legitimate needs and interests.
FRAMEWOR
K
Core features

7
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Guiding
DEMO
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Principles
 4. Materiality
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An Editor PDF-XChange
integrated report Editor information
should disclose PDF-XChange Editor that
about matters
DEMO DEMO substantively affect DEMO
the organization’s ability to DEMO
create value over the
short, medium and long term.

FRAMEWOR
K
Core features

7
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Guiding
DEMO
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Principles
PART 2 – THEINTEGRATEDREPORT
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6. Reliability
PDF-XChange Editor and completeness
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DEMO An integrated reportDEMO
should include all material matters,
DEMO both positive
and negative, in a balanced way and without material error.

FRAMEWOR
K
Core features

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7
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Guiding
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Principles
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 7. Consistency
PDF-XChange Editor and comparability
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DEMO DEMO The information in anDEMO
integrated report should be presented:
DEMO
• On a basis that is consistent over time
• In a way that enables comparison with other organizations to the extent
it is
material to the organization’s own ability to create value over time.
FRAMEWOR
K
Core features

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7
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Guiding
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Principles
PART 2 – THEINTEGRATEDREPORT
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1. Organizational
PDF-XChange Editor overview and external
PDF-XChange Editor environment
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DEMO An integrated report should
DEMOanswer the question: What does the organization do
DEMO
and what are the circumstances under which it operates?

FRAMEWOR
K
Core features

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Content
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Elements
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 2. Governance
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An integrated report should answer the question: How does the
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organization’s
governance structure support its ability to create value in the short, medium
and long term?

FRAMEWOR
K
Core features

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Content
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Element
s
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 3. Business
PDF-XChange Editor Model PDF-XChange Editor PDF-XChange Editor
An integrated report should answer the question: What is the
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organization’s
business model?

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K
Core features

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Content
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Element
s
 4. Risks and opportunities
PDF-XChange Editor PDF-XChange Editor report should
An integrated PDF-XChange Editor
answer the question: What PDF-XChange Editor
are the specific risks and
DEMO DEMO opportunities that affect the organization’s ability to create
DEMO DEMOvalue over the
short, medium and long term, and how is the organization dealing with them?

FRAMEWOR
K
Core features

DEMO
8
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Content
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DEMO
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Elements
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 5. Strategy
PDF-XChange Editor and Resource Allocation
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An integrated report should answer the question: Where does the
DEMO DEMO DEMO DEMO
organization
want to go and how does it intend to get there?

FRAMEWOR
K
Core features

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Content
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Element
s
PART 2 – THEINTEGRATEDREPORT
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6. Performance
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An integrated report should answer the question: To what extent has the
DEMO DEMO DEMO
organization achieved its strategic objectives for the period and what
are its outcomes in terms of effects on the capitals?

FRAMEWOR
K
Core features

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Content
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Element
s
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 7. Outlook
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An integrated report should answer the question: What challenges and
DEMO DEMO DEMO DEMO
uncertainties is the organization likely to encounter in pursuing its strategy,
and what are the potential implications for its
business model and future performance?

FRAMEWOR
K
Core features

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Content
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DEMO
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Element
s
PART 2 – THEINTEGRATEDREPORT
PDF-XChange Editor 8. Basis
PDF-XChange of preparation
Editor and Presentation
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An integrated report should answer the question: How does the
DEMO DEMO DEMO DEMO
organization
determine what matters to include in the integrated report and how are
such matters quantified or evaluated?

FRAMEWOR
K
Core features

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Content
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DEMO
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DEMO
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Element
s
PART 2 – THEINTEGRATEDREPORT
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DEMO DEMO DEMO DEMO

BENEFITS

• By providing a more complete picture of strategy, business model, governance and

performance – and how they link together – an integrated report can help
stakeholders to make better informed decisions about where to allocate their
capital.

• It also helps share information on a broader range of metrics that contribute

to long-term value and the role an organization plays in society, including its use
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of resources. PDF-XChange Editor PDF-XChange Editor
DEMO DEMO DEMO DEMO
• This helps organizations attract value investors – and can take some of the focus
and pressure off short-term, quarter-to-quarter results.

• And, by advancing transparency in capital markets and creating a more

comprehensive picture of risk and return, all organizations benefit more broadly
from the advantages of a more resilient and competitive global economy.
PART 2 – THEINTEGRATEDREPORT
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DEMO DEMO DEMO DEMO

BARRIERSANDCHALLENGES

• The systematic development of measurement and reporting on an integrated basis

may represent a large cost for some organisations.

• The feasibility and applicability of this form of reporting must also be tested across
organisations of different sizes.

• Organisations will be hesitant to provide too much disclosure for fear of risking
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PDF-XChange Editor sensitive information,
PDF-XChange including
Editor details on strategy, and value
PDF-XChange drivers.
Editor
DEMO DEMO DEMO DEMO
• Integrated Reporting offers a new challenge for existing audit and assurance
processes.
• One example includes the concept of materiality, which is well-established
and tested for the more quantitative elements of financial reporting, but less
understood for qualitative elements that are more common in an
environmental or social context.
 PART 2 – THEINTEGRATEDREPORT
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DEMO DEMO DEMO DEMO

DEFINED: OBJECTIVES: APPROACH:

a concise overview Reported information better A principles-based
of the organisation’s aligned with investor
structure, including needs with better
governance and its allocation of
main activities; capital, including values
creation.

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DEMO 3
Fundamental
Concepts DEMO 7 Guiding
Principles
DEMO 8 DEMO
1. Strategic focus and future
1. Value Creation for the orientation comparability
organization and for 2. Connectivity of information
3. Stakeholder relationships 4.
FRAMEWORK others
Materiality
2. The Capitals
Core features 5. Conciseness
3. The Value Creation 6. Reliability and
Process completeness
7. Consistency and
 Elements
1. Organizational environment 7. Outlook
overview and 2. Governance 5. Strategy and resource 8. Basis of preparation and
external 3. Business model allocation presentation
4. Risks and opportunities 6. Performance
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DEMO DEMO DEMO INTEGRATED DEMO

REPORTING
A Value Creation Process

THAN
K
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DEMO
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DEMO
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DEMO
YOU PDF-XChange Editor
DEMO

LECTURE
R DR. Mara Ridhuan Bin Che Abdul
Rahman
PRESENTEDBY
Iskandar Tony Bin Jovini (GA03725)
EPPA4123ACCOUNTINGTHEORYANDPRACTICE