CHAPTER FIVE

A comprehensive business reporting model

A COMPREHENSIVE BUSINESS REPORTING MODEL: Financial Reporting for Investors was published by the CFA Institute as part of its Codes, Standards and Position Papers (see www.standardsetter.de/drsc/docs/qb/2006_q1/a_q1_06_sonstiges_cfa_a_comprehense_business_reporting_model.pdf).

The Comprehensive Business Reporting Model is a framework for developing financial reports and disclosures that meet the needs of investors, such as equity investors, creditors and other providers of capital. The model proposes 12 principles to ensure that financial statements' disclosures are relevant, clear, accurate, understandable and comprehensive. It calls for broader, more comprehensive business reporting that provides sufficient information to investors to understand the wealth-generating activities of a company and the results of those activities. Implementation of the model improves the ability of investors and investment professionals to evaluate companies' performance and financial condition, and to make well-informed investment decisions.

The contents of this 67-page report include very pertinent commentary as to:

• The purpose of financial reporting;
• Business reporting modelling;
• Disclosures.