The accounting of the natural resources including its level of stock and availability to the business is calculated in the natural capital accounting. The calculation in this accounting is in the physical form or in monetary transactions. The consumption level of natural resources is informed to the government and it is involved in the consumer decision making so as to know the sustainable behavior. The issues of sustainability are calculated through this accounting method.
The impact of this accounting in the business and on the internal and external stakeholders like investors plays a significant role. The business sustainability will be known through Natural capital and environment accounting that helps the company to make further decisions (Lee, & Parker, 2013). The investors will come to the extent to which the organization is sustainable and its social and environmental responsibility. This will help in the investment decision making.
The impact of the business model has a major influence in the financial accounting and reporting. The business model shows how an organizational strategy is executed within the company, which helps in the assessing the long term feasibility of the company, value of the company, its business strategies and so on. As per the IIRC Framework, many capitals are included in the business model. The sources that helps the business model to frame the organizational value are tangible assets like financial capita, manufacturing capital etc, intangible assets like human capital, intellectual capital etc.
In this accounting, the transactions of joint ventures, subsidiaries etc are included in the financial report. The impact of these transactions in the financial accounting is that the company as well as its stakeholders will be able to know the business performance of its joint ventures and subsidiaries. By analyzing the same, necessary strategic improvements and business decisions can be made.
Sustainable development is one of the main aims of an organization. Hence, the business model and strategic designing of the company should be such a manner to protect the stock of capital. The impact of the business strategies and business activities on the capitals needs to be analyzed. Thereby any prevailing sustainability can be reduced. Working capital of a company is the deduction of current liabilities from current assets.