Task: This assessment (PACC6005 – FINANCIAL ACCOUNTING 3 (Economic Consequences)) is an individual task in which the student is required to write a
report on a topic included in this paper.
Total Marks: 25 marks (25% of total assessment).
Reading Materials: Journal Articles
Submission: Hard copy submission in the class and Online submission through
Blackboard.
Submission Guidelines
– Assignments must be submitted by the due date.
– Students should include the cover page designed by the University of Newcastle
with the assignment.
– All assignments must be submitted online and hard copy in the class. Submissions
via email will not be accepted.
– Assignment must be typed, and submission file should be in word.
– Each page of the assignment should be numbered.
– Whenever necessary assignment must be properly referenced, and referencing
should follow American Psychological Association (APA) 6th edition style.
Extensions of Submission Date:
– All requests for extensions must be submitted through adverse circumstances
application before the assignment submission due date.
Late Submission
– The mark for an assessment item submitted after the designated time on the due
date, without an approved extension of time, will be reduced by 10% of the
possible maximum mark for that assignment item for each day or part day that the
assessment item is late.
– Note that this applies equally to week and weekend days.
During the past two decades, there have been many ideas for improving business
reporting, and nearly all of them focus on the importance of companies providing more
nonfinancial information. One reason for the growth in disclosure of nonfinancial
information is that the percentage of an entity’s market value that can be attributed to
tangible assets has diminished from about 80% in 1975 to less than 20% in 2009. A 2003
Institute of Chartered Accountants of England and Wales white paper analysed 11
initiatives to reform reporting and reached the following conclusion:
“None of these models, whatever their merits, has so far succeeded in commanding general support.” But if no framework for non financial reporting has risen to the level of International.
Question PACC6005 – FINANCIAL ACCOUNTING 3 (Economic Consequences)
Financial Reporting Standards (IFRS) or U.S. Generally Accepted Accounting Standards
(GAAP), an increasing number of companies have been experimenting with more
effective disclosure of nonfinancial information. According to CorporateRegister.com, a
data repository with over 35,000 reports from 8,220 different companies in 168
countries, almost 5,400 reports containing sustainability and other nonfinancial
information were published in 2010.
In addition to voluntary non financial reporting by companies, other initiatives have been
launched to push the development of more rigorous and systematic reporting of
nonfinancial information. For example, South Africa has mandated “integrated
reporting”—specifically, a single report that combines information on the company’s
financial performance with information on its nonfinancial performance. In 2010, the
Johannesburg Stock Exchange (JSE) codified the King III recommendations by amending
its listing rules to require approximately 450 listed companies either to produce an
integrated report in place of their annual financial and sustainability reports or to explain
why they are not doing so.
Another example is the United Nations Principles for Responsible Investment’s (UNPRI)
Sustainable Stock Exchange Initiative. This initiative is aimed at exploring how
exchanges, investors, regulators, and companies can work together to improve disclosure
of ESG performance and encourage long-term approaches to investment. Emerging
market exchanges are leading the way in terms of implementing sustainability disclosure
and other measures to enhance corporate sustain-ability reporting of listed companies.
For example, exchanges in Brazil, China, Egypt, India, Indonesia, Malaysia, and South
Africa have all issued ESG disclosure rules in recent years.
In January 2011, a coalition of investors wrote to the CEOs of 30 stock exchanges to
demand that sustainability reporting be embedded within listing rules and that listed
companies put a forward-looking sustainability strategy to vote at their annual general
meeting. The letter also sought opinions on, among other things, how companies should be integrating sustainability into long-term strategic decision-making and encouraging
companies to undertake integrated reporting.
The above paragraphs are extracted from the below article
Eccles, R. G., & Serafeim, G. (2011). Market interest in non financial information. Journal
of Applied Corporate Finance, 23(4), 113-128.
Required:
Write a report (maximum 2000 words) to discuss the economic consequences of
nonfinancial information reporting. In your report, you are required to:
– Identify and discuss the nature of non financial information.
– Identify and discuss of the nature of economic consequences.
– Discuss how non financial information should be reported.
– Integration of the discussion of these two concepts and discussion of economic
consequences of the non financial information reporting.
Guidelines for the report
1. Look for UoN library for the research articles regarding the economic
consequences of nonfinancial information.
2. Nonfinancial information includes corporate social responsibility
reporting/performance (CSR), environmental, social and governance (ESG)
reporting/performance, environmental reporting/performance, social
reporting/social performance, financial inclusion reporting, green banking
disclosures.
3. Economic consequences mean capital market and debt market impact of the
information.
Note: Where you refer to the accounting standards, text book, website or other resources
you will need to include APA referencing. You should include a reference list at the end of
your assignment.