The Term “Business Model” in Financial Reporting: Does It Need a Proper Definition?

Read  full  paper  at:

welcome papers!


In the last five years, the vocabulary of financial reporting has been enriched by a new specific term: “business model”. However, as the expression is rather equivocal, it is not still possible to find an unanimously shared meaning of the term in the literature. Because of the relatively recent application of the term “business model” in financial reporting, the investigation of its proper meaning is still an uninflated topic of research. Specific purpose of this paper is trying to contribute in finding a proper definition of this term when used in financial reporting (if any). In this sense, after having reviewed the main literature on “business model” definition we have analyzed the parts of the comment letters on the IASB’s Discussion Paper 2013/1—titled “Review of the Conceptual Framework for Financial Reporting”—which deal with “business model” definition. In particular, the questions whose answers have been specifically investigated are the following: 1) Should the IASB define “business model”? Why or why not? 2) If you think that “business model” should be defined, how would you define it? However, considering the contrasting definitions found both in the literature and in the comment letters, it is not still possible to get a widely accepted meaning of the term “business model” in financial reporting. For these reasons, at this stage of research, the authors completely agree with the thought of Singleton-Green that asserts, “Defining or agreeing a definition of the term “business model” will not advance our understanding of the financial reporting issues”.

Cite this paper

Sorrentino, M. and Smarra, M. (2015) The Term “Business Model” in Financial Reporting: Does It Need a Proper Definition?. Open Journal of Accounting, 4, 11-22. doi: 10.4236/ojacct.2015.42002.


[1] Page, M. (2014) Business Models as a Basis for Regulation of Financial Reporting. Journal of Management and Governance, 18, 683-695.
[2] IASB—International Accounting Standards Board (2009) IFRS 9 “Financial Instruments”. IFRS Foundation, London.
[3] FRC—Financial Reporting Council (2010) The UK Corporate Governance Code. Financial Reporting Council, London.
[4] IASB—International Accounting Standards Board (2010) Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12 Income Taxes). IFRS Foundation, London.
[5] ASIC—Australian Securities & Investments Commission (2011) Regulatory Guide 228 Prospectuses: Effective Disclosure for Retail Investors.
[6] EFRAG—European Financial Reporting Advisory Group (2013) The Role of the Business Model in Financial Statements. Research Paper, EFRAG.
[7] IASB—International Accounting Standards Board (2013) Discussion Paper DP/2013/1: A Review of the Conceptual Framework for Financial Reporting. IFRS Foundation, London.
[8] Ghaziani, A. and Ventresca, M.J. (2005) Keywords and Cultural Change: Frame Analysis of Business Model Public Talk 1975-2000. Sociological Forum, 523-559.
[9] Osterwalder, A., Pigneur, Y. and Tucci, C.L. (2005) Clarifying Business Models: Origins, Present and Future of the Concept. Communications of the Association for Information Systems, 15, 1-38.
[10] Amit, R. and Zott, C. (2010) Designing Your Future Business Model: An Activity System Perspective. Long Range Planning, 43, 216-226.


Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  更改 )

Google+ photo

You are commenting using your Google+ account. Log Out /  更改 )

Twitter picture

You are commenting using your Twitter account. Log Out /  更改 )

Facebook photo

You are commenting using your Facebook account. Log Out /  更改 )


Connecting to %s