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Our Financial Reporting Expert Group contributed to our response to the EFRAG/ ANC/ FRC consultation on the Role of the Business Model in Financial Statements Research Paper. We supported that the use of the business model could play a useful role in financial reporting, allowing for greater openness which should improve the relationship between investors and management. We noted that criteria should be included in the IASB’s Conceptual Framework to provide a more understandable and consistent approach for accounting standard setters to consider the business model and to allow preparers to prepare comparable statements which users can understand at a general level and formulate decisions thereon. We further noted that clear guidelines are necessary regarding the reporting of the attributes of the cash conversion cycle, and that any application of the approach should only be introduced after a detailed cost benefit analysis has been conducted, bearing in mind the impact on small and mid size quoted companies.

Click here to download the response (pdf)

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