The Chartered Institute of Management Accountants (CIMA), the International Federation of Accountants (IFAC) and PwC have released a paper on the business model as key to integrated reporting.

The paper, Business Model, has been published ahead of the International Integrated Reporting Council’s (IIRC) International Integrated Reporting Framework, which is due to be released for comment on 16 April.

Against the background of an "inconsistent" business model, "influenced by the presence of regional legislation, corporate governance codes and listing requirements", the paper explores different approaches "with the aim of reaching a common, widely-accepted definition of the business model for use in Integrated Reporting." It also suggests business model reporting content to be presented in the IIRC’s proposed framework.

Ian Ball, IFAC principal advisor and chair of the IIRC Working Group, said understanding the business model was "at the centre of integrated reporting", with businesses needing to communicate their business activities, products and services in order to demonstrate the creation of value over time.

Charles Tilley, CIMA chief executive, added that while corporate reports have become "more complex" they now "provide less insight" to investors in terms of value creation.

He said: "Integrated reporting will involve a change in mindset for many organisations as they think about how to better communicate strategy, performance, and prospects.

The paper is supported by PwC research which shows that only 40% of FTSE 350 companies provide insightful data on business models, and only 8% integrate business model reporting with strategy and business risks.

Mark O’Sullivan, director, PwC, contrasted this with 77% of companies that mention business models in their accounts, adding that the information is "critical" for investors to form their views, with the "growing complexity" of business relationships and changing technology increasing demand for insights into such models.