Purpose -The purpose of this paper is to contribute to the current discussions about the concept of Integrated Reporting (IR) and provides a practical and useful proposal of an instrument that could help to apply the IR concept in corporate practice. Design/methodology/approach -The study uses a deductive normative research approach. Findings -Based on a comprehensive review of international literature and research, the paper argues that a structured presentation of the traditional measure of "value added" in a so-called "value added statement" (VAS) has the potential to serve as a practical and effective reporting instrument for IR. The proposed VAS not only meets the guiding principles of IR but also reports on the monetary effects of different types of capital included in IR and in this way complements and represents the concept of IR very well.Research limitations/implications -The authors intend to stimulate the academic as well as institutional discussion on how to apply the concept of IR at the corporate level. As the characteristics of the proposed VAS comply well with the guiding principles and concepts developed in the Integrated Reporting Framework project of the International Integrated Reporting Council (IIRC) and with the ultimate objective of integrated thinking, the study can inform the current considerations within and outside of the IIRC. Originality/value -The future of IR and the probability of its world-wide application in practice will depend on the development of appropriate reporting tools that incorporate the central ideas of IR, currently no such reporting tools exist. In this paper the authors make an argument for a VAS as a complementing, useful and therefore appropriate reporting tool for IR.

The decision of the Commission of the European Union (EU) to oblige listed European companies, from 2005 onwards, to establish their consolidated financial statements according to IFRS (IAS) represents a preliminary peak in the internationalization process of financial accounting in Europe. The purpose of this paper is to highlight the landmarks of accounting developments in the EU since the Fourth and Seventh Directives and to reveal the obvious internationalization process of financial accounting in the EU, which has accelerated considerably during the last ten years. Owing to the considerable pressures exerted by market forces, a clear convergence of accounting practice as well as of the regulatory frameworks of the EU and its Member States with IFRS (IAS) is recognizable. The harmonization effects of the market forces on national regulators and companies appear to be much larger than those of the Fourth and Seventh Directives. In addition to the explanation and reasoning behind past developments, this paper also discusses some future prospects of financial reporting within the EU and identifies some of its major challenges.

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