A project on the Role of the Business Model in Financial Reporting has commenced as part of the EFRAG’s pro-active work. The aim of the project is to provide European input to the future consideration, development and use of the business model concept in financial reporting. The project is being led by EFRAG and supported by the UK ASB and the French ANC. As part of the arrangements for the project, a pan-European advisory panel is being established to support the work, and EFRAG is now seeking nominations for membership of that panel.
The objective of the project is to investigate the possible role of the business model concept within financial reporting. This investigation will include an assessment of the implications of the business model on recognition, measurement, presentation, disclosure and performance reporting within the wider financial report. The project aims to provide European input into the IASB’s future consideration, development and use of the business model concept in financial reporting.
The business model concept has gained increasing prominence in financial reporting. With the introduction of IFRS 9 it has also recently been introduced into standard setting Standard setters, accounting bodies, preparers, users and academics have considered what role, if any, it should play in financial reporting. To date, views on this matter seem to be divided.
However, there is no single definition of the business model. Some argue that it is an ill defined concept and it can (or will) be used with different meanings. The result is that it potentially undermines comparability and allows an entity’s management to present the results according to their interpretation of the meaning. Others argue that the business model provides vital information about the value drivers within an entity and therefore is particularly relevant for performance reporting.
The pan-European Advisory Panel (Business Model Advisory Panel or BMAP) will provide advice and other input to the work and will help ensure that the wider European perspective is reflected in the work.
· The intention is that the BMAP will have at least 12 members.
· BMAP meetings will usually take place in Brussels, although some meetings may take place in other locations within Europe.
· The BMAP is expected to meet once every 3 to 4 months. In addition to face-to-face meetings, the BMAP will conduct some its business via email and conference calls to ensure members’ time is used efficiently.
· BMAP members are expected to bear their own travel and other costs in participating in the BMAP. Appointments to the BMAP are personal, and therefore not transferable.
· In order to ensure the widest possible participation whilst keeping face-to-face meetings manageable, the intention is to permit some members of the BMAP to be ‘correspondence members’. Correspondence members will receive all papers that other BMAP members receive, but are not expected to attend meetings. Instead, they will provide their input and other comments via email or the telephone.
Nominations for membership of the BMAP are invited from all backgrounds, including preparers, auditors, users and academics. As EFRAG is keen to ensure that the information needs of users are taken into account in the project; nominations from users of financial statements would be particularly welcome.
Nominations can be sent by the candidates themselves or by organisations on their behalf. If you wish to nominate someone or yourself, please write to EFRAG (Ms. Nathalie Saintmard, Secretariat, firstname.lastname@example.org) by 28 January 2011 including a CV and other relevant details.
If you require further information or have any questions about the project, please contact:
Mario Abela (EFRAG Research Director) - email@example.com
Annemiek Vromans (Project manager) - firstname.lastname@example.org