Get to grips with the six capitals (2024)

FAQs

Get to grips with the six capitals? ›

Get to grips with the six capitals

Six capitals. The International Integrated Reporting Council (IIRC) identifies six categories of capital which help an organisation create value: financial, manufactured, intellectual, human, social and relationship, and natural.

1.2 The capitals identified by the IIRC are: financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital, and natural capital. Together they represent stores of value that are the basis of an organization's value creation.

The six capitals, covering financial, manufactured, human, intellectual, social and relationship, and natural, are emphasised in King IV to remind you of all the forms of capital you may use or affect.

The capitals are stocks of value that are affected or transformed by the activities and outputs of an organisation. The <IR> Framework categorizes them as financial, manufactured, intellectual, human, social and relationship, and natural.

The Capital Framework is the policy framework used by the Territory to support the successful delivery of capital projects in the ACT.

The seven community capitals are natural, cultural, human, social, political, financial, and built. Strong and resilient communities strive for balanced investments in these seven capitals.

What is the principle 6 of the King IV report? ›

Principle 5: ensure that reports issues by the organisation enable stakeholders to make informed assessments of the organisation's performance and its short, medium and long-term prospects. Principle 6: serve as the focal point and custodian of corporate governance in the organisation.

1 Kings 7:16 Amplified Bible (AMP)

He also made two capitals (crowns) of cast bronze to put on the tops of the pillars; the height of one capital was five cubits, and the height of the other capital was five cubits.

It is useful to differentiate between five kinds of capital: financial, natural, produced, human, and social. All are stocks that have the capacity to produce flows of economically desirable outputs.

Capital is a broad term for anything that gives its owner value or advantage, like a factory and its equipment, intellectual property like patents, or a company's or person's financial assets. Even though money itself can be called capital, the word is usually used to describe money used to make things or invest.

Fixed capital are assets of a business that are permanent in nature and are not intended to be disposed of by a business. These assets include land, buildings, plant, machinery, fixed equipment, furniture, fixtures, vehicles, livestock, etc.

The total amount invested in the business by the owner is called Capital. Excess of assets over the liabilities is known as Capital.

The Capitals Approach

A capitals approach enables organisations to understand how their success is directly or indirectly underpinned by natural capital, social capital and human capital, empowering them to make decisions that offer the greatest value across all capitals.

The capital structure theory known as the net income approach says there is a direct relationship between the capital structure and the value of the business. That is, lowering the cost of capital can increase the value of a company. More debt is cheaper because of the ability to deduct interest and lower taxes.

The capital theory is a state-centric system of ideas where national governments oversee a portfolio of capital stocks of four families: natural capital, economic capital, human capital, and social capital.

This involves developing a long-term plan that identifies and prioritizes necessary capital projects, establishes a project timeline, and assigns responsibility for execution. This plan should consider factors such as the age and condition of your building, industry standards and regulations, and stakeholder input.