CPA Australia SMA cheat sheet

Strategic management accounting (SMA) extends cost accounting outward: it adds competitor, supplier, customer and market cost data to internal cost data, and links cost structure to competitive position rather than reporting historical cost alone.

Value chain analysis separates primary activities (inbound logistics, operations, outbound logistics, marketing and sales, service) from support activities (firm infrastructure, HR, technology development, procurement); cost advantage is assessed activity by activity, including upstream supplier and downstream customer costs.

Cost driver hierarchy (Cooper and Kaplan): unit-level, batch-level, product-sustaining and facility-sustaining costs. Only unit-level costs vary proportionally with volume; batch and product-sustaining costs vary with complexity, so high-volume simple products are systematically over-costed by volume-based absorption.

Activity-based costing: cost per activity driver = activity cost pool / total driver quantity; product cost = sum of (driver quantity consumed x driver rate) plus direct costs. ABC improves accuracy when products differ in complexity and overhead is large relative to direct cost.

Target costing: allowable cost = target selling price - required profit margin. The cost gap = current estimated cost - allowable cost; closing the gap requires design, value-engineering or supply-chain changes before production, since most lifecycle cost is locked in at design.

Kaizen costing applies continuous incremental cost reduction during production, in contrast to target costing's design-stage focus and standard costing's periodic variance control.

Lifecycle costing accumulates all costs from R&D, design, production, distribution, service and end-of-life disposal; decisions based on manufacturing cost alone mislead when pre- and post-production costs dominate.

Throughput accounting (theory of constraints): throughput = sales revenue - truly variable (material) costs; the constraint (bottleneck) sets system output. Rank products by throughput per unit of bottleneck resource, not by gross margin per unit.

Cost estimation: high-low method uses variable cost per unit = (highest cost - lowest cost) / (highest activity - lowest activity); regression uses all observations and reports R-squared and standard error, giving a measurable reliability indicator that high-low lacks.

Budget sequence: sales budget first (it drives all others), then production budget = sales units + closing finished goods - opening finished goods; direct material purchases = production material needs + closing raw material - opening raw material.

Cash budget distinguishes cash receipts and payments from accrual revenue and expense; depreciation, accrued wages and bad-debt write-offs are non-cash and are excluded from cash payments.

Flexible budget restates revenue and cost for actual output using standard rates; the sales-volume variance is the difference between the static (master) budget and the flexible budget, and is the only variance explained purely by volume.

Standard costing variances: material price = (standard price - actual price) x actual quantity purchased; material usage = (standard quantity for actual output - actual quantity used) x standard price; labour rate = (standard rate - actual rate) x actual hours; labour efficiency = (standard hours - actual hours) x standard rate.

Variable overhead efficiency variance uses the same hours base as labour efficiency; fixed overhead is analysed into expenditure and volume variances, with volume split into capacity and efficiency components under absorption costing.

Sales variances: sales price variance = (actual price - standard price) x actual volume; sales volume contribution variance = (actual volume - budgeted volume) x standard contribution per unit. Mix and yield variances apply where a standard input mix exists.

Zero-based budgeting builds each budget from a decision package with no reference to prior-year spend; incremental budgeting adjusts last year's base. ZBB suits discretionary and support cost centres; incremental suits stable, high-volume operations.

Rolling (continuous) budgets are re-forecast each period by adding a new period and dropping the expired one, keeping the planning horizon constant; they cost more to administer than annual budgets but reduce end-of-year gaming.

Beyond budgeting critiques fixed annual targets and central control, substituting relative targets, rolling forecasts, devolved decision rights and a distinction between forecast (best estimate) and target (stretch aspiration).

Behavioural control: budgets set at attainable-but-stretch levels support motivation; budget slack (padding) arises where managers are rewarded on budget achievement, and participative budgeting reduces slack only when genuine influence exists.

Return on investment = divisional profit / divisional invested capital. Residual income = divisional profit - (required rate of return x invested capital). ROI encourages asset divestment and rejects projects earning above the cost of capital but below current divisional ROI; RI accepts them.

EVA = NOPAT - (WACC x adjusted invested capital), where NOPAT and capital are adjusted for accounting distortions (capitalised R&D, operating leases, non-recurring items). EVA charges for all capital, including equity.

Balanced Scorecard four perspectives: financial, customer, internal business process, and learning and growth. Each perspective carries objectives, measures, targets and initiatives, linked by cause-and-effect logic from learning and growth upward to financial outcomes.

Performance measure quality criteria: valid (measures what it claims), reliable (consistent across raters and periods), timely, cost-effective, and controllable by the evaluated manager. Measures outside a manager's control should be excluded or explicitly adjusted.

Transfer pricing methods: market price where an active intermediate market exists; cost-plus where it does not; negotiated price where autonomy is preserved. The general transfer pricing rule sets minimum transfer price = variable cost + opportunity cost of the internal transfer.

Goal congruence requires divisional performance measures to align with corporate objectives; transfer pricing disputes, ROI-driven underinvestment and negotiated prices above market all create divergence.

Benchmarking types: internal, competitive, functional (against best practice in any industry) and generic process benchmarking. It compares processes and practices, not only cost outcomes.

Non-financial operational measures: quality (defect rate, first-pass yield), cycle time, on-time delivery, customer satisfaction and retention, employee turnover and training hours. They act as leading indicators of future financial performance.

Relevant costs are future costs that differ between alternatives. Sunk costs, allocated common fixed costs and committed costs are irrelevant; historical cost is never relevant to a forward decision.

Opportunity cost is the contribution forgone from the next-best alternative use of a scarce resource and is included as a cost in the preferred option, even though it never appears in accounting records.

Special order rule: accept if incremental revenue exceeds incremental variable cost plus any incremental fixed cost and opportunity cost, and if spare capacity exists and the order does not erode existing market price.

Make-or-buy: compare avoidable internal cost (variable cost plus avoidable fixed cost plus opportunity cost of freed capacity) with the external purchase price plus incremental costs of buying (quality, delivery, supplier risk). Unavoidable fixed costs are irrelevant.

Keep-or-drop: a segment is dropped only if its avoidable costs exceed its revenue plus any contribution lost elsewhere. Allocated head office costs persist after the drop and are irrelevant to the decision.

Constrained resource (limiting factor) rule: rank products by contribution per unit of the scarce resource, then produce in rank order; the optimal plan maximises total contribution subject to the constraint.

Linear programming: objective function maximises contribution; constraints express resource limits; the optimal solution lies at a corner of the feasible region. Shadow price = increase in contribution from one additional unit of a binding constraint.

Relevant costing for pricing: cost-plus pricing uses full absorption cost plus a markup, but incremental and competitive pricing decisions should use incremental cost plus opportunity cost as the floor.

Expected value = sum of (probability x outcome). It is suited to repeatable decisions; for one-off decisions consider risk attitude and the range of outcomes, not only the expected value.

Qualitative factors (customer reaction, employee morale, supplier reliability, regulatory and reputational risk) must be evaluated alongside quantified relevant costs and can reverse a numerically favourable recommendation.

Porter's generic strategies: cost leadership, differentiation and focus (cost focus or differentiation focus). Being stuck in the middle delivers neither lowest cost nor perceived uniqueness, and typically compresses margin.

Porter's Five Forces: rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers. High combined force intensity depresses industry profitability.

Resource-based view (Barney, VRIN): a resource yields sustained competitive advantage only if it is valuable, rare, inimitable and non-substitutable; organisational support (VRIO) is required to exploit it.

SWOT analysis maps internal strengths and weaknesses against external opportunities and threats; it is a summary tool, not an analytical method, and must be paired with evidence-based internal and external analysis.

Ansoff matrix: market penetration, product development, market development and diversification; risk increases along each axis, with diversification carrying the highest risk.

Value creation: shareholder value is driven by return on invested capital relative to WACC; value is created only when ROIC exceeds the cost of capital and growth is funded at returns above that cost.

Triple bottom line reports economic, social and environmental performance. Integrated reporting ( Framework) connects strategy, governance, performance and prospects to the organisation's ability to create value over time across six capitals.

Six capitals of integrated reporting: financial, manufactured, intellectual, human, social and relationship, and natural capital. Impacts on each capital are value creation, preservation or erosion.

Sustainability management accounting: environmental management accounting traces material, energy, water and waste costs to processes; carbon accounting quantifies Scope 1 (direct), Scope 2 (purchased energy) and Scope 3 (value chain) emissions for cost and risk decisions.

Sustainability-linked performance measures (emissions intensity, water use per unit, safety incident rate, supplier ESG compliance) are integrated into the balanced scorecard to align incentives with long-term value creation.

Strategic management accounting (SMA) extends cost accounting outward: it adds competitor, supplier, customer and market cost data to internal cost data, and links cost structure to competitive position rather than reporting historical cost alone.

Value chain analysis separates primary activities (inbound logistics, operations, outbound logistics, marketing and sales, service) from support activities (firm infrastructure, HR, technology development, procurement); cost advantage is assessed activity by activity, including upstream supplier and downstream customer costs.

Cost driver hierarchy (Cooper and Kaplan): unit-level, batch-level, product-sustaining and facility-sustaining costs. Only unit-level costs vary proportionally with volume; batch and product-sustaining costs vary with complexity, so high-volume simple products are systematically over-costed by volume-based absorption.

Activity-based costing: cost per activity driver = activity cost pool / total driver quantity; product cost = sum of (driver quantity consumed x driver rate) plus direct costs. ABC improves accuracy when products differ in complexity and overhead is large relative to direct cost.

Target costing: allowable cost = target selling price - required profit margin. The cost gap = current estimated cost - allowable cost; closing the gap requires design, value-engineering or supply-chain changes before production, since most lifecycle cost is locked in at design.

Kaizen costing applies continuous incremental cost reduction during production, in contrast to target costing's design-stage focus and standard costing's periodic variance control.

Lifecycle costing accumulates all costs from R&D, design, production, distribution, service and end-of-life disposal; decisions based on manufacturing cost alone mislead when pre- and post-production costs dominate.

Throughput accounting (theory of constraints): throughput = sales revenue - truly variable (material) costs; the constraint (bottleneck) sets system output. Rank products by throughput per unit of bottleneck resource, not by gross margin per unit.

Cost estimation: high-low method uses variable cost per unit = (highest cost - lowest cost) / (highest activity - lowest activity); regression uses all observations and reports R-squared and standard error, giving a measurable reliability indicator that high-low lacks.

Budget sequence: sales budget first (it drives all others), then production budget = sales units + closing finished goods - opening finished goods; direct material purchases = production material needs + closing raw material - opening raw material.

Cash budget distinguishes cash receipts and payments from accrual revenue and expense; depreciation, accrued wages and bad-debt write-offs are non-cash and are excluded from cash payments.

Flexible budget restates revenue and cost for actual output using standard rates; the sales-volume variance is the difference between the static (master) budget and the flexible budget, and is the only variance explained purely by volume.

Standard costing variances: material price = (standard price - actual price) x actual quantity purchased; material usage = (standard quantity for actual output - actual quantity used) x standard price; labour rate = (standard rate - actual rate) x actual hours; labour efficiency = (standard hours - actual hours) x standard rate.

Variable overhead efficiency variance uses the same hours base as labour efficiency; fixed overhead is analysed into expenditure and volume variances, with volume split into capacity and efficiency components under absorption costing.

Sales variances: sales price variance = (actual price - standard price) x actual volume; sales volume contribution variance = (actual volume - budgeted volume) x standard contribution per unit. Mix and yield variances apply where a standard input mix exists.

Zero-based budgeting builds each budget from a decision package with no reference to prior-year spend; incremental budgeting adjusts last year's base. ZBB suits discretionary and support cost centres; incremental suits stable, high-volume operations.

Rolling (continuous) budgets are re-forecast each period by adding a new period and dropping the expired one, keeping the planning horizon constant; they cost more to administer than annual budgets but reduce end-of-year gaming.

Beyond budgeting critiques fixed annual targets and central control, substituting relative targets, rolling forecasts, devolved decision rights and a distinction between forecast (best estimate) and target (stretch aspiration).

Behavioural control: budgets set at attainable-but-stretch levels support motivation; budget slack (padding) arises where managers are rewarded on budget achievement, and participative budgeting reduces slack only when genuine influence exists.

Return on investment = divisional profit / divisional invested capital. Residual income = divisional profit - (required rate of return x invested capital). ROI encourages asset divestment and rejects projects earning above the cost of capital but below current divisional ROI; RI accepts them.

EVA = NOPAT - (WACC x adjusted invested capital), where NOPAT and capital are adjusted for accounting distortions (capitalised R&D, operating leases, non-recurring items). EVA charges for all capital, including equity.

Balanced Scorecard four perspectives: financial, customer, internal business process, and learning and growth. Each perspective carries objectives, measures, targets and initiatives, linked by cause-and-effect logic from learning and growth upward to financial outcomes.

Performance measure quality criteria: valid (measures what it claims), reliable (consistent across raters and periods), timely, cost-effective, and controllable by the evaluated manager. Measures outside a manager's control should be excluded or explicitly adjusted.

Transfer pricing methods: market price where an active intermediate market exists; cost-plus where it does not; negotiated price where autonomy is preserved. The general transfer pricing rule sets minimum transfer price = variable cost + opportunity cost of the internal transfer.

Goal congruence requires divisional performance measures to align with corporate objectives; transfer pricing disputes, ROI-driven underinvestment and negotiated prices above market all create divergence.

Benchmarking types: internal, competitive, functional (against best practice in any industry) and generic process benchmarking. It compares processes and practices, not only cost outcomes.

Non-financial operational measures: quality (defect rate, first-pass yield), cycle time, on-time delivery, customer satisfaction and retention, employee turnover and training hours. They act as leading indicators of future financial performance.

Relevant costs are future costs that differ between alternatives. Sunk costs, allocated common fixed costs and committed costs are irrelevant; historical cost is never relevant to a forward decision.

Opportunity cost is the contribution forgone from the next-best alternative use of a scarce resource and is included as a cost in the preferred option, even though it never appears in accounting records.

Special order rule: accept if incremental revenue exceeds incremental variable cost plus any incremental fixed cost and opportunity cost, and if spare capacity exists and the order does not erode existing market price.

Make-or-buy: compare avoidable internal cost (variable cost plus avoidable fixed cost plus opportunity cost of freed capacity) with the external purchase price plus incremental costs of buying (quality, delivery, supplier risk). Unavoidable fixed costs are irrelevant.

Keep-or-drop: a segment is dropped only if its avoidable costs exceed its revenue plus any contribution lost elsewhere. Allocated head office costs persist after the drop and are irrelevant to the decision.

Constrained resource (limiting factor) rule: rank products by contribution per unit of the scarce resource, then produce in rank order; the optimal plan maximises total contribution subject to the constraint.

Linear programming: objective function maximises contribution; constraints express resource limits; the optimal solution lies at a corner of the feasible region. Shadow price = increase in contribution from one additional unit of a binding constraint.

Relevant costing for pricing: cost-plus pricing uses full absorption cost plus a markup, but incremental and competitive pricing decisions should use incremental cost plus opportunity cost as the floor.

Expected value = sum of (probability x outcome). It is suited to repeatable decisions; for one-off decisions consider risk attitude and the range of outcomes, not only the expected value.

Qualitative factors (customer reaction, employee morale, supplier reliability, regulatory and reputational risk) must be evaluated alongside quantified relevant costs and can reverse a numerically favourable recommendation.

Porter's generic strategies: cost leadership, differentiation and focus (cost focus or differentiation focus). Being stuck in the middle delivers neither lowest cost nor perceived uniqueness, and typically compresses margin.

Porter's Five Forces: rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers. High combined force intensity depresses industry profitability.

Resource-based view (Barney, VRIN): a resource yields sustained competitive advantage only if it is valuable, rare, inimitable and non-substitutable; organisational support (VRIO) is required to exploit it.

SWOT analysis maps internal strengths and weaknesses against external opportunities and threats; it is a summary tool, not an analytical method, and must be paired with evidence-based internal and external analysis.

Ansoff matrix: market penetration, product development, market development and diversification; risk increases along each axis, with diversification carrying the highest risk.

Value creation: shareholder value is driven by return on invested capital relative to WACC; value is created only when ROIC exceeds the cost of capital and growth is funded at returns above that cost.

Triple bottom line reports economic, social and environmental performance. Integrated reporting ( Framework) connects strategy, governance, performance and prospects to the organisation's ability to create value over time across six capitals.

Six capitals of integrated reporting: financial, manufactured, intellectual, human, social and relationship, and natural capital. Impacts on each capital are value creation, preservation or erosion.

Sustainability management accounting: environmental management accounting traces material, energy, water and waste costs to processes; carbon accounting quantifies Scope 1 (direct), Scope 2 (purchased energy) and Scope 3 (value chain) emissions for cost and risk decisions.

Sustainability-linked performance measures (emissions intensity, water use per unit, safety incident rate, supplier ESG compliance) are integrated into the balanced scorecard to align incentives with long-term value creation.

Strategic management accounting (SMA) extends cost accounting outward: it adds competitor, supplier, customer and market cost data to internal cost data, and links cost structure to competitive position rather than reporting historical cost alone.

Value chain analysis separates primary activities (inbound logistics, operations, outbound logistics, marketing and sales, service) from support activities (firm infrastructure, HR, technology development, procurement); cost advantage is assessed activity by activity, including upstream supplier and downstream customer costs.

Cost driver hierarchy (Cooper and Kaplan): unit-level, batch-level, product-sustaining and facility-sustaining costs. Only unit-level costs vary proportionally with volume; batch and product-sustaining costs vary with complexity, so high-volume simple products are systematically over-costed by volume-based absorption.

Activity-based costing: cost per activity driver = activity cost pool / total driver quantity; product cost = sum of (driver quantity consumed x driver rate) plus direct costs. ABC improves accuracy when products differ in complexity and overhead is large relative to direct cost.

Target costing: allowable cost = target selling price - required profit margin. The cost gap = current estimated cost - allowable cost; closing the gap requires design, value-engineering or supply-chain changes before production, since most lifecycle cost is locked in at design.

Kaizen costing applies continuous incremental cost reduction during production, in contrast to target costing's design-stage focus and standard costing's periodic variance control.

Lifecycle costing accumulates all costs from R&D, design, production, distribution, service and end-of-life disposal; decisions based on manufacturing cost alone mislead when pre- and post-production costs dominate.

Throughput accounting (theory of constraints): throughput = sales revenue - truly variable (material) costs; the constraint (bottleneck) sets system output. Rank products by throughput per unit of bottleneck resource, not by gross margin per unit.

Cost estimation: high-low method uses variable cost per unit = (highest cost - lowest cost) / (highest activity - lowest activity); regression uses all observations and reports R-squared and standard error, giving a measurable reliability indicator that high-low lacks.

Budget sequence: sales budget first (it drives all others), then production budget = sales units + closing finished goods - opening finished goods; direct material purchases = production material needs + closing raw material - opening raw material.

Cash budget distinguishes cash receipts and payments from accrual revenue and expense; depreciation, accrued wages and bad-debt write-offs are non-cash and are excluded from cash payments.

Flexible budget restates revenue and cost for actual output using standard rates; the sales-volume variance is the difference between the static (master) budget and the flexible budget, and is the only variance explained purely by volume.

Standard costing variances: material price = (standard price - actual price) x actual quantity purchased; material usage = (standard quantity for actual output - actual quantity used) x standard price; labour rate = (standard rate - actual rate) x actual hours; labour efficiency = (standard hours - actual hours) x standard rate.

Variable overhead efficiency variance uses the same hours base as labour efficiency; fixed overhead is analysed into expenditure and volume variances, with volume split into capacity and efficiency components under absorption costing.

Sales variances: sales price variance = (actual price - standard price) x actual volume; sales volume contribution variance = (actual volume - budgeted volume) x standard contribution per unit. Mix and yield variances apply where a standard input mix exists.

Zero-based budgeting builds each budget from a decision package with no reference to prior-year spend; incremental budgeting adjusts last year's base. ZBB suits discretionary and support cost centres; incremental suits stable, high-volume operations.

Rolling (continuous) budgets are re-forecast each period by adding a new period and dropping the expired one, keeping the planning horizon constant; they cost more to administer than annual budgets but reduce end-of-year gaming.

Beyond budgeting critiques fixed annual targets and central control, substituting relative targets, rolling forecasts, devolved decision rights and a distinction between forecast (best estimate) and target (stretch aspiration).

Behavioural control: budgets set at attainable-but-stretch levels support motivation; budget slack (padding) arises where managers are rewarded on budget achievement, and participative budgeting reduces slack only when genuine influence exists.

Return on investment = divisional profit / divisional invested capital. Residual income = divisional profit - (required rate of return x invested capital). ROI encourages asset divestment and rejects projects earning above the cost of capital but below current divisional ROI; RI accepts them.

EVA = NOPAT - (WACC x adjusted invested capital), where NOPAT and capital are adjusted for accounting distortions (capitalised R&D, operating leases, non-recurring items). EVA charges for all capital, including equity.

Balanced Scorecard four perspectives: financial, customer, internal business process, and learning and growth. Each perspective carries objectives, measures, targets and initiatives, linked by cause-and-effect logic from learning and growth upward to financial outcomes.

Performance measure quality criteria: valid (measures what it claims), reliable (consistent across raters and periods), timely, cost-effective, and controllable by the evaluated manager. Measures outside a manager's control should be excluded or explicitly adjusted.

Transfer pricing methods: market price where an active intermediate market exists; cost-plus where it does not; negotiated price where autonomy is preserved. The general transfer pricing rule sets minimum transfer price = variable cost + opportunity cost of the internal transfer.

Goal congruence requires divisional performance measures to align with corporate objectives; transfer pricing disputes, ROI-driven underinvestment and negotiated prices above market all create divergence.

Benchmarking types: internal, competitive, functional (against best practice in any industry) and generic process benchmarking. It compares processes and practices, not only cost outcomes.

Non-financial operational measures: quality (defect rate, first-pass yield), cycle time, on-time delivery, customer satisfaction and retention, employee turnover and training hours. They act as leading indicators of future financial performance.

Relevant costs are future costs that differ between alternatives. Sunk costs, allocated common fixed costs and committed costs are irrelevant; historical cost is never relevant to a forward decision.

Opportunity cost is the contribution forgone from the next-best alternative use of a scarce resource and is included as a cost in the preferred option, even though it never appears in accounting records.

Special order rule: accept if incremental revenue exceeds incremental variable cost plus any incremental fixed cost and opportunity cost, and if spare capacity exists and the order does not erode existing market price.

Make-or-buy: compare avoidable internal cost (variable cost plus avoidable fixed cost plus opportunity cost of freed capacity) with the external purchase price plus incremental costs of buying (quality, delivery, supplier risk). Unavoidable fixed costs are irrelevant.

Keep-or-drop: a segment is dropped only if its avoidable costs exceed its revenue plus any contribution lost elsewhere. Allocated head office costs persist after the drop and are irrelevant to the decision.

Constrained resource (limiting factor) rule: rank products by contribution per unit of the scarce resource, then produce in rank order; the optimal plan maximises total contribution subject to the constraint.

Linear programming: objective function maximises contribution; constraints express resource limits; the optimal solution lies at a corner of the feasible region. Shadow price = increase in contribution from one additional unit of a binding constraint.

Relevant costing for pricing: cost-plus pricing uses full absorption cost plus a markup, but incremental and competitive pricing decisions should use incremental cost plus opportunity cost as the floor.

Expected value = sum of (probability x outcome). It is suited to repeatable decisions; for one-off decisions consider risk attitude and the range of outcomes, not only the expected value.

Qualitative factors (customer reaction, employee morale, supplier reliability, regulatory and reputational risk) must be evaluated alongside quantified relevant costs and can reverse a numerically favourable recommendation.

Porter's generic strategies: cost leadership, differentiation and focus (cost focus or differentiation focus). Being stuck in the middle delivers neither lowest cost nor perceived uniqueness, and typically compresses margin.

Porter's Five Forces: rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers. High combined force intensity depresses industry profitability.

Resource-based view (Barney, VRIN): a resource yields sustained competitive advantage only if it is valuable, rare, inimitable and non-substitutable; organisational support (VRIO) is required to exploit it.

SWOT analysis maps internal strengths and weaknesses against external opportunities and threats; it is a summary tool, not an analytical method, and must be paired with evidence-based internal and external analysis.

Ansoff matrix: market penetration, product development, market development and diversification; risk increases along each axis, with diversification carrying the highest risk.

Value creation: shareholder value is driven by return on invested capital relative to WACC; value is created only when ROIC exceeds the cost of capital and growth is funded at returns above that cost.

Triple bottom line reports economic, social and environmental performance. Integrated reporting ( Framework) connects strategy, governance, performance and prospects to the organisation's ability to create value over time across six capitals.

Six capitals of integrated reporting: financial, manufactured, intellectual, human, social and relationship, and natural capital. Impacts on each capital are value creation, preservation or erosion.

Sustainability management accounting: environmental management accounting traces material, energy, water and waste costs to processes; carbon accounting quantifies Scope 1 (direct), Scope 2 (purchased energy) and Scope 3 (value chain) emissions for cost and risk decisions.

Sustainability-linked performance measures (emissions intensity, water use per unit, safety incident rate, supplier ESG compliance) are integrated into the balanced scorecard to align incentives with long-term value creation.