ACCA Strategic Professional · Strategic Business Reporting (International) · Analysis and interpretation of financial and non-financial information and measurement of performance

Kestrel plc is preparing its first integrated report. The finance director proposes to describe only inputs such as cash, factory space and employee numbers under the heading 'capitals'. Which statement is correct in relation to the Integrated Reporting Framework?

The Framework identifies six capitals: financial, manufactured, intellectual, human, social and relationship, and natural. The report should show how the business model transforms these capitals into outputs and outcomes, so describing inputs alone is inadequate. The capitals are not limited to recognised assets and the labels are not mandatory.

1. AThe six capitals are financial, manufactured, intellectual, human, social and relationship, and natural; outputs and outcomes should also be discussed as the capitals are increased, decreased or transformedCorrect
2. BThe capitals are only financial, manufactured and human, because these are recognised in the statement of financial position
3. CThe capitals are limited to assets that meet the IFRS Conceptual Framework definition of an asset, so internally generated brand cannot be a capital
4. DOrganisations must report on all six capitals and use the prescribed labels and format