In an effort to more accurately reflect the value of today's knowledge-based businesses, Big 5 firm PricewaterhouseCoopers has launched a new framework for financial reporting called ValueReporting, a new method of capturing what is important to 21st century businesses. The new financial reporting framework was announced at a Silicon Valley forum organized by PwC.
"Our surveys of executives, analysts and investors have revealed widespread agreement that current reporting models, which were designed to measure such tangible assets as factories, equipment and inventory, do not convey the kinds of information that today's marketplace needs," said PricewaterhouseCoopers partner, Bob Herz. "Measuring the worth of companies in today's economy requires value-based information, such as capital spending, R&D, brand value, market share, customer retention, intellectual capital and other intangible assets, which traditional corporate reporting does not measure."
The ValueReporting framework announced by PwC takes into consideration the marketplace's need for intangible information to better communicate key business activities and initiatives which executives feel more accurately reflect the values of their company.
The accounting profession will undoubtedly see a strong push towards value-based reporting and will continue to redefine its role to the stakeholders of American business.
For more on the ValueReporting framework, and for the results of the survey of top executives that clarifies the need for this type of new reporting mechanism, see PwC's Press Release.