Abstract
This paper presents a theoretical rationale and framework for expanding or supplementing the current versions of financial reporting in various economies under the label of Integrated Financial Reporting (IFR) for business and non-business organizations. IFR, modeled on the lines of national income accounts (NIA), is distinguished from financial reporting in two key respects: (1) expanding its focus to include resource flows to and from shareholders as well as other participants, and (2) shifting the focus from gross resource flows to net (economic) surplus accruing to each participant or class of participants. The value of the firm to each participant would be the capitalized value of the net resource flows to each participant, and the value of the firm as a whole will be the sum of its value of all participants. Such an integrated system of reporting will furnish better data for corporate, governance, regulatory, and macro-economic decision making.
Published Version
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