The International Integrated Reporting (IRR) Framework Explains How Organisations Create

question 44

Essay

The International Integrated Reporting (IRR) Framework explains how organisations create value over time. Identify and detail the six different kinds of capital that are defined in the IRR framework.

---

Definitions:

Interest

The cost of borrowing money or the income earned from lending money, usually calculated as a percentage of the principal amount.

Forward Contract

A bespoke arrangement between two parties for acquiring or disposing of an asset at a designated price on an upcoming date.

Hedge

An investment made to reduce the risk of adverse price movements in an asset.

Speculative Forward Contract

A financial derivative used to speculate on the future price of an asset, involving an agreement to buy or sell the asset at a future date for a price determined today.