The Determination of Essentiality as a Leading Principle of the Formation of Integrated Reporting

Abstract

The definition of essentiality as the leading principle of formation of integrated reporting is considered. The normative basis of essentiality in the context of integrated reporting is the International standard for integrated reporting. The principle of essentiality is that the integrated report should disclose information on issues that have a significant impact on an assessment of the organization’s ability to generate value in the short, medium, and long term periods. Essential for an integrated report is information that is capable of making changes to the organization’s value creation procedure. The definition of essentiality indicates that the essential information is the one that can change the order of assessment of any particular event. Therefore, insignificant for the integrated report is the information that cannot and does not bring such changes. The lack of a clear methodology for determining the essentiality, on the one hand, facilitates application of the principle of essentiality in specific conditions, and on the other — reduces the comparability of indicators of integrated reporting.

Keywords

• essentiality
• integrated reporting
• essential factors