The business model as a determinant of financial statements
The future of a business organization depends on its business model and which factors and resources are involved; they determine the profitability and the way of creating value. The financial statements present the financial consequences of the entity's activities, which are determined by the business model. The aim of this article is to answer the question as to what extent the entity's business model should be considered for the recognition, measurement and disclosure (presentation) of information in financial statements? The first part of this article presents the current scope of the use of the business model concept in financial reporting and the results of research conducted by the European Financial Reporting Advisory Group (EFRAG) regarding the possible implementation of the business model concept to the IFRSIFRS Conceptual Framework and the impact of this approach on the quality characteristics of financial statements. The second part of the article presents the use of information about the entity's business model to improve the content of financial statements. (original abstract)
- Bezold A., 2009, The subject matter of financial reporting: the conflict between cash conversion cycles and fair value in the measurement of income, CEASA Occasional paper Series, NY Columbia Business School.
- Chesbrough H.W., 2007, Why companies should have open business models, "MIT Sloan Management Review", vol. 48, no. 2, pp. 22-28.
- CICA, 2012, Toward a measurement framework for financial reporting by profit-oriented entities, J. A. Milburn, Canadian Institute of Chartered Accountants (online).
- EFRAG, 2009, Performance Reporting: A European Discussion Paper, European Financial Reporting Advisory Group and Instituto de Contabilidad y Auditoria de Cuentas (online)
- EFRAG, 2013, The role of the business model in financial statements, Research Paper
- George G., Bock A., 2011, The business model in practice and its implications for entrepreneurship research, "Entrepreneurship Theory and Practice", vol. 35, no. 1, pp 83-111
- http://www.theiirc.org/wp-content/uploads/2013/12/13-12-08-THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf, 2013
- IASB, 2013, International Financial Reporting Standards.
- ICAEW, 2010, Business models in accounting: the theory of the firm and financial reporting, Institute of Chartered Accountants of England and Wales (online).
- Lai R., Weill P., Malone T., 2006, Do business models matter?, MIT (online).
- Leisenring J., Linsmeier T., Schipper C., Trott E., 2012, Business-model (intent)-based accounting, "Accounting and Business Research", vol. 42, no. 3, pp. 329-344.
- Lennard A., 2007, Stewardship and the objectives of financial statements: A comment on IASB's Preliminary Views on an Improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics of Decision-Useful Financial Information, "Accounting in Europe", vol. 4, pp. 51-66.
- Magretta J., 2002, Why business models matter, "Harvard Business Review", vol. 80, no 5, pp 86-92
- Nielsen C., Bukh P.N., 2011, What constitutes a business model: the perception of financial analysts, "International Journal of Learning and Intellectual Capital", vol. 8, no. 3, pp. 256-271.
- Osterwalder A., Pigneur Y., Tucci C.L., 2005, Clarifying business models: origins, present and future of the concept, "Communications of the Association for Information Systems", no. 15, May, pp. 1-38.
- Palepu K., Healy P., Bernard V., 2003, Business Analysis & Valuation, Using Financial Statements, Thomson, South-Western.
- Poniatowska-Jaksch M., Duczkowska-Małysz K., 2013, Model biznesu. Nowe myślenie strategiczne, Difin, Warszawa.
- PWC, 2007, Measuring assets and liabilities: investment professionals' views, PWC, February (online).
- Richardson J., 2008, The business model: An integrative framework for strategy execution, "Strategic Change", vol. 17, no. 5-6, pp. 133-144.