A conceptual framework for business accounting of social capital elements

Abstract

Subject. This article deals with the issues of reflection of social capital in integrated reporting and methodological support for the processes of its formation in the business accounting system. Objectives. The article aims to prove the need for this reflection and describe an approach to determining the content of new accounting methods. To achieve this goal, it is advisable to use the theory of economic agreements. Methods. For the study, we used the methods of analysis, considering the institutional economics, integrated reporting, and the Framework for the Preparation and Presentation of Financial Statements. Results. The article substantiates the expediency of forming defined-benefit pension plans for entrepreneurs, employees and the State, and it emphasizes that the right of the employee to receive a fixed amount of money after the one's employment activity has ended, should be reflected in the defined-benefit schemes. Conclusions. The proposed social capital business accounting model fits well into the fundamental concept of integrated reporting, and it can be an integral part of an integrated report. Information on social capital is necessary for a balanced social security system involving commercial organizations, employees, and the State.