CMA Part 1 · External Financial Reporting Decisions
The divisional manager at Vandermere Enterprises wants the call centre's integrated report to communicate how the business model creates long-term value. Which approach best serves this objective?
- A.Showing how call-handling activities transform staff and technology inputs into customer loyalty outcomes.
- B.Revaluing call centre facilities and telecommunications equipment on the balance sheet to current market values.
- C.Allocating fixed overhead expenses across handled customer contacts using standard activity-based costing rates.
- D.Maximizing short-term contact handling volume per representative without assessing the impact on employee burnout.
Show answer and explanation
Answer: A
Under the International Integrated Reporting Framework, the value creation process depicts how an organization draws upon various capitals as inputs (such as human and intellectual/technology capital), uses business activities to convert them into outputs (handled contacts), and ultimately generates outcomes (such as customer loyalty and brand reputation) that create or preserve value over time.