Accounting Alert


Accounting Alert - January 2014

Staying on top of developments

The future of corporate reporting?

International framework for integrated reporting finalised

The International Integrated Reporting Council (IIRC) has released its ‘International Integrated Reporting <IR> Framework’ (<IR> Framework). The <IR> Framework seeks to explain the fundamental concepts, principles and content requirements underlying an 'integrated report', which is considered the next step in the evolution of corporate reporting.


The International Integrated Reporting Council (IIRC) was formed in August 2010 with the objective of creating a globally accepted framework for a process that results in communication by an organisation about value creation over time. The initial formation of the IIRC involved HRH The Prince of Wales bringing together The Prince’s Accounting for Sustainability Project (A4S), the Global Reporting Initiative (GRI), and a cross section of representatives from civil society, corporate entities, accounting firms and organisations, regulators, non-government organisations and standard-setters.

Since its initial formation, the IIRC has rapidly pursued its objectives, from the issue of the initial discussion paper in September 2011 to a prototype framework in November 2012 and consultation draft in April 2013. The finalised <IR> Framework takes into consideration feedback received on these earlier documents.

Overview of <IR>

Integrated reporting (stylised by the IIRC as '<IR>') is seen by the IIRC as the basis for a fundamental change in the way in which organisations are managed and report to stakeholders.

A stated aim of <IR> is to support integrated thinking and decision-making. Therefore, an integrated report is not a report that combines the financial statements or annual report and any separate corporate responsibility or sustainability report into one report. It is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term.

There are three fundamental concepts underpinning <IR>:

  1. Value creation for the organisation and for others. An organisation’s activities, its interactions and relationships, its outputs and the outcomes for the various capitals it uses and affects influence its ability to continue to draw on these capitals in a continuous cycle.
  2. The capitals. The capitals are the resources and the relationships used and affected by the organisation, which are identified in the <IR> Framework as financial, manufactured, intellectual, human, social and relationship, and natural capital. However, these categories of capital are not required to be adopted in preparing an entity’s integrated report , and an integrated report may not cover all capitals – the focus is on capitals that are relevant to the entity
  3. The value creation process. At the core of the value creation process is an entity’s business model, which draws on various capitals and inputs, and by using the entity’s business activities, creates outputs (products, services, by-products, waste) and outcomes (internal and external consequences for the capitals).


The <IR> Framework notes that:

“The primary purpose of an integrated report is to explain to providers of financial capital how an organization creates value over time. An integrated report benefits all stakeholders interested in an organization’s ability to create value over time, including employees, customers, suppliers, business partners, local communities, legislators, regulators, and policy-makers.”

The <IR> Framework includes guiding principles that underpin the preparation of an integrated report, informing the content of the report and how information is presented, and content elements, being the key categories of information required to be included in an integrated report under the Framework, presented as a series of questions rather than a prescriptive list of disclosures.

Deloitte’s newsletter <IR> in Focus — The IIRC releases the International Integrated Reporting <IR> Framework provides more information on the principles and content elements included in the <IR> Framework. It is available for download at: .

For more information:

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