Do companies disclose relevant information about intangibles? Insights from business model reporting and risk reporting

Chiara Crovini, Francesco Giunta, Christian Nielsen, Lorenzo Simoni

Research output: Book/ReportReportResearchpeer-review


The corporate reporting landscape is continuing to evolve. The decision by the European Commission to revise and extend the non-financial reporting directive, the development of tentative non-financial reporting standards by the European Financial Reporting Advisory Group (EFRAG), and the establishment of the International Sustainability Standards Board within the IFRS Foundation have emphasized the power of narrative reporting to convey useful information.
Among non-financial items that companies communicate in the narrative section of the annual report, intangible elements have attracted the attention of many economic actors. The difficulties in capturing the value of intangibles have spurred a reflection, which has recently culminated in the EFRAG discussion paper about better information on intangibles. Among the proposed solutions to convey meaningful information, EFRAG emphasizes the role of narrative reporting and the linkage to value creation. That is particularly true for all the knowledge-based resources that are difficult to identify and recognize in a company’s balance sheet, like know-how, relationships, expertise, and skills. Those resources fall under the name of intellectual capital (IC).
The renovated attention of different actors to IC has led ICAS and EFRAG to sponsor a project developed by Chiara Crovini (Aalborg University Business School), Francesco Giunta (University of Florence), Christian Nielsen (principal investigator, Aalborg University Business School), and Lorenzo Simoni (University of Genoa).
The project has investigated IC disclosure in narrative reports of intangible-intensive companies focusing on two provisions related to narrative reporting: the duty to report information about the business model and to depict the main risks associated with a company’s operations.
The business model offers a schematic representation of how a company delivers and captures value through its resources, activities, and relationships. Hence, business model reporting is the lens that allows users of the annual report to interpret financial and non-financial information as it represents the link between corporate communication and the value creation process. Risk reporting addresses the main elements affecting a company’s capacity to exploit and protect the business model value drivers. Therefore, companies could take advantage of those requirements to offer investors valuable information about IC. On the one hand, business model reporting helps to illustrate the role of the main IC items in value creation. On the other hand, risk reporting could be a valuable tool to describe the main threats and opportunities relating to the company’s ability to exploit and protect those (intangible) value drivers.
Consequently, the project has investigated whether and how companies use business model reporting and risk reporting to convey information about IC and the integration between the two sections by analyzing the correspondence between the IC elements presented in the business model section and those reported in the risk section.
Original languageEnglish
PublisherInstitute of Chartered Accountants of Scotland
Number of pages48
ISBN (Electronic)978-1-909883-79-6
Publication statusPublished - 2022


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  • Intangibles

    Nielsen, C. & Crovini, C.


    Project: Research

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