How deliberate reporting can help unlock value within organisations
Akinyemi Awodumila
An organisation’s ability to approach corporate reporting deliberately enables effective communication with stakeholders. When done correctly, corporate reporting not only highlights the value within an organisation but can also assist in unlocking this value embedded within the organisation.
This ability to unlock value is sometimes the difference between an organisation that thrives and one that does not during an economic downturn or shock.
It could also give an organisation added flexibility when dealing with complex issues in the operating environment, such as agreeing on debt financing terms.
It allows organisations to successfully implement a turnaround or rescue plan. Some ways deliberate reporting helps organisations unlock value include the following.
Organisations can obtain debt or equity financing easily when their reporting demonstrates robust financial health. It includes highlighting the strength of the balance sheet on critical components such as the performance in the profit or loss statement.
Reporting that captures historical performance and solid future growth potential is equally essential in attracting financing.
In the public sector, organisations can use deliberate reporting to unlock value through privatisation exercises that offer financing flexibility to a government.
Public organisations can capture the commercial value of their assets and operations that are enhanced through private ownership or involvement and result in an overall increase in output in an economy.
Deliberate reporting can help organisations drive efficiency by capturing key performance indicators such as return on investments and assets that form the basis for assessing performance across many industries.
Stakeholders can benchmark these ratios to global standards for efficient capital allocation, preservation of assets and driving improvements.
Getting more output from each unit of input is a core tenet of management. Therefore, the demand for efficiency will continue to grow, and deliberate reporting will help unlock this value across organisations.
Deliberate reporting can assist organisations with their asset-fair values for the benefit of stakeholders. These fair values could form the basis of future planning or other transactions that create value and offer flexibility when organisations navigate change and disruption.
Akinyemi Awodumila is an Audit Partner at Deloitte East Africa. The views expressed are his own and not necessarily those of Deloitte. He can be reached at aawodumila@deloitte.co.ke.
