Why Is VMRC Taking This Step?

The call to change the current reporting model can be attributed to the fact that the model is too focused on events and transactions that have happened and cannot be changed, while ignoring future events that a company can make use of to create value. For several years a growing number of groups and thought leaders have issued challenges to the current model.

 

The need is there for both more and better information for investors and creditors and a structure to standardize that information from organization to organization within or between industries. Current attempts at providing more information are unstructured and not comparable between organizations. Capital markets, investors, creditors, management and boards of directors will benefit by having a more comprehensive view of the true value of an organization. VMRC believes that a model that includes intangibles can be positioned as a credible, complementary system that supplements the perspective provided by the traditional accounting framework, and can succeed in communicating the value creation performance of the knowledge-based corporations of the 21 st century.

 

VMRC was formed to coordinate value measurement efforts on a global basis. Existing activities in the area demonstrate that value measurement is gaining merit. While key stakeholders recognize that value measurement is an important component of financial reporting, the problem of acceptance and uniform application across the business and financial community remains. A key challenge is that many decision-makers and influencers are still unfamiliar with the concept of value measurement. It follows that efforts are stymied by lack of knowledge and acceptance. Hence the reason for one of the VMRC's core objectives to educate and inform various stakeholder groups about value measurement and reporting and the benefits it creates.