EY - Integrated reporting: tips for organizations

Integrated reporting: tips for organizations

Practical tips for organizations

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Reporting has evolved as organizations seek to meet investors’ demands for more information. However, research indicates that investors feel disclosure shortfalls remain, especially in the reporting of strategy, risks and future performance.

Also, non-financial information, which is often disclosed in different ways, isn’t easily comparable between organizations.

We believe integrated reporting, as proposed by the International Integrated Reporting Council (IIRC), could be one direction for the future of corporate reporting by providing a holistic and longer-term view of an organization’s performance.

Why integrated reporting?

The market value of organizations has slowly shifted from a price based largely on tangible assets to greater emphasis on intangible assets. In turn, the concept of value has shifted and broadened.

Now, more than ever, creating sustainable value for organizations depends on:

  • Adapting to change and the challenges and opportunities in their environments
  • Effectively managing intangible assets, which can represent a substantial portion of market value

Integrated reporting has been created to better articulate the broader range of metrics that contribute to long-term value and the role organizations play in society. Central to the approach is the view that value is increasingly shaped by factors such as reliance on the environment, social reputation, and human capital skills.

Integrated reporting is the direction of the future of corporate reporting.

Current approaches to financial reporting don’t make it easy to assess an organization’s long-term value creation prospects and are not deemed sufficient by investors. There are two key interrelated reasons for investor unease1:

  • It’s not easy to compare non-financial information that’s often accounted for in different ways.
  • Intangible assets have gone from accounting for just 17% of market value in 1975 to 80% by 2010.

Increasing value of intangible assets

Components of S&P 500 market value

EY chart – Increasing value of intangible assets

Source: Ocean Tomo, LLC, “Ocean Tomo’s Annual Study of Intangible Asset Market Value – 2010,” 4 April 2011.


1 ACCA, Eurosif; “What do investors expect from non-financial reporting,” June 2013.

Increasing value of intangible assets

Components of S&P 500 market value
EY chart – Increasing value of intangible assets
Source: Ocean Tomo, LLC, “Ocean Tomo’s Annual Study of Intangible Asset Market Value – 2010,” 4 April 2011.


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