A model for integrated capital disclosure and performance reporting: separating objects from value

This paper introduces a conceptual model for integrated capital disclosure (ICD) and performance reporting. The paper details the design of a simplified key element taxonomy that highlights current and forecasted product, people and physical infrastructure (3Ps) resources, transactions and activities as carriers and drivers of intellectual capital (IC). We introduce object recognition and tracking technologies and suggest to separate accounting object definitions from valuation and measurement methods. Each reporting entity or organization has to report and forecast cash flows and accounting estimates, and should disclose potential IC, including risk assessment, based on the key element taxonomy. Financial capital is reconciled in a separate schedule. The taxonomy matrix allows aligned risk and integrated reporting assessments to be more focused, thereby reducing duplication in reporting. The matrix also codifies and integrates financial and sustainability (non-financial) reporting disclosures. Further studies should determine whether the proposed concepts lead to better use and understanding of information. There is a vacuum in assessing the performance of entities on the basis of total information made up of financial and non-financial reporting. Financial, sustainability, IC, tax and statistics reports, and other data are difficult to understand for those who are not industry experts. The ICD model combines and relates information. The suggested new concepts and paradigm changes are designed to reduce this complexity, and should result in more focused comparisons between and within industries.