Managerial Accounting: PwC Value Framework for Assa Abloy

This report analyzes the PwC value framework for Assa Abloy, a global leader in opening solutions, and evaluates the quality of information published in their annual report. The report covers external drivers, strategy objectives, resources and relationships, and performance, with a focus on competitive, regulatory, economic, social, and technical factors.

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
Name of the University
Authors Note
Course ID

1MANAGERIAL ACCOUNTING
Executive Summary
The value framework of PwC is depicted with the approach for managing and measuring the
company’s performance and at the same time reporting the important aspects of disclosures.
This excerpt of information is useful in completion of a reporting model which is designated
as per meeting the requirements of investors in a more transparent and detailed manner. The
various sections of the study have made a critical interrogation for the quality of information
published in the annual report of Assa Abloy. This is identified with the important elements
which are outlined by PWC value framework.
Assa Abloy is considered as one of the global leaders in the opening solutions such as
manufacturing of electromechanical locks, digital door locks, mechanical locks, security
doors, hotel security and entrance automation. The consideration of both annual report and
sustainability report are analysed as per individual framework elements which are
commented upon as per quality of performance. The important health elements of
organisation have been conducted with strategy goals objectives, governance, risk and
remission aspects. The organisational performance elements have included segment of
performance, environmental performance and economic performance.

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Table of Content
s
Introduction................................................................................................................................4
External Drivers: Competitive...................................................................................................4
External Drivers: Regulatory and Geopolitical..........................................................................6
External Drivers: Economic.......................................................................................................7
External Drivers: Social.............................................................................................................9
External Drivers: Technical.....................................................................................................10
Strategy: Strategy objectives....................................................................................................12
Strategy: Business model.........................................................................................................13
Strategy: Governance...............................................................................................................15
Strategy: Risk...........................................................................................................................17
Strategy: Remuneration............................................................................................................18
Resources and Relationships: Financial Assets:......................................................................20
Resource and Relationship: Physical Assets............................................................................22
Resource and Relationship: Customers....................................................................................24
Resource and Relationship: People & Culture.........................................................................25
Resource and Relationship: Innovation – G&S.......................................................................27
Resource and Relationship: Brand & Intellectual Assets........................................................28
Resource and Relationship: Processes & Supply Chain..........................................................29

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Performance: Operational........................................................................................................31
Performance: Economic Performance......................................................................................33
Performance: Social Performance:...........................................................................................34
Performance: Environmental...................................................................................................36
Performance: Segmental..........................................................................................................37
Materiality................................................................................................................................39
Conclusion................................................................................................................................41
References................................................................................................................................42

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Introduction
The present content of the report has been stated in terms of the PWC value
framework applied for Assa Abloy. The main experts of the study will examine the different
types of the areas pertaining to the activates such as sourcing of the information from the
strategic objectives, stakeholder relationship, performance and resources. The important
considerations of the report will also include the various types of the other extent of the
discussions which will be focused in terms of aligning the decision-making framework of the
organization with the use of the appropriate accountability concepts.
External Drivers: Competitive
Report Extract-Page 13
Reporting Critique
The discussion on the competitive aspect can be identified under Globalization
benefits of ASSA ABLOY. The reporting critique for the competitors can be further found in
terms of the value creation in distribution. The product leadership offerings are also stated
under the annual report.

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Accessibility
The accessibility of such an information can be depicted under the markets overhead
stated with markets under page 13 of the annual report. The information on the product
leadership can be depicted in terms of the product leadership heading which is shown under
page 30 of the annual report.
Comprehensiveness
The comprehensiveness can be depicted in terms of the local presence in terms of the
competitive advantages. The similar concept is also applicable to the globalization trend of
ASSA ABLOY for promoting the various aspects of smart and cost-effective approach. The
competitiveness in terms of the product leadership can be depicted with the offering of the
new products pertaining to the high innovation rate. The launching of the new products has
further accounted for 25% of the overall sales.
Overall Conclusion
ASSA ABLOY is discerned to carry out the competitor’s risk analysis on both social
and local level. Moreover, it has considered significant disclosures on the global scope of
competition associated with the company thereby making the overall disclosure process as
good.

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External Drivers: Regulatory and Geopolitical
Reporting Extract: Page 101
Reporting Critique
The scope of information as per the regulatory framework can be found under Report
on other legal and regulatory requirements. These is significant scope of information declared
as per the accounts and the consolidated accounts. The geo political context of the
information has been stead under the risk management disclosure.

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Accessibility
The expert of information on Report on other legal and regulatory requirements can
be sourced in page 101 of the annual report. Moreover, there is significant nature of the
information leading to the geo-political changes in the business which can be duly referred in
pages 10, pages 13 and page 26 of the annual report.
Comprehensiveness
 The geo political context of the information has been further stated with the exposure
to the various types of information pertaining to the strategic, operational and
financial risks.
 The regulatory requirements as per the annual report is stated with the opinions audit
of the annual accounts as per the ASSA.
 The main basis of the opinions has been further depicted with the conduction of the
audit as per the generally accepted auditing standards in Sweden
Overall Conclusion
It can be seen that despite of the sufficient nature of the disclosure on the Report on
the legal and regulatory requirements in terms of the Responsibilities of the Board of
Directors and the Managing Director and Auditor’s responsibility. However, there is a
significant gap of information pertaining to the geo political changes. Therefore, such a
disclosure pertaining to this information can be seen to be bad.
External Drivers: Economic
Reporting Extract: Page 70

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Reporting Critique
The reporting critique as per the economic information can be identified in terms of
the various types of the disclosures made under research and development. The economic
benefits are stated with the impact on intangible assets and PPE disclosures.
Accessibility
The accessibility of this information can be seen under page 70 of annual report. This
is directly stated under Research and development. The economic benefits are also stated
under the other intangible assets and PPE disclosures in page 70.
Comprehensiveness
 The company has stated that the various extent of the information as considered per
the research expenses incurred.

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 Moreover, the developmental expenditures are recognised as per the information
given in the balance sheet of the company with the main extent of information
pertaining to generate the future economic benefits.
 The information on the intangible assets is also seen with a non-acquisition related
economic benefits for the assets associated with the group. Such an asset is depicted
under the initial recognition cost and amortization.
 The comprehensiveness of the reporting has been further seen with the
Overall Conclusion
The overall depictions of the information show that there is significant nature of
reporting for the economic impacts there is considerable number of sources included by the
company in their annual report with the implication on intangible assets and PPE. Therefore,
such a reporting of information can be stated as good in nature.
External Drivers: Social
Reporting Extract: Page 7
Reporting Critique
In the section of goals and outcomes it can be seen that there is significant disclosure
of the information considered with the social KPI.

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Accessibility
The social KPI information can be extracted from page 7 of the annual report.
Comprehensiveness
 The social KPI is portrayed from the information associated with the injury rate and
role of women in management positions.
 The company has set a social target of reducing the injury rate by 55% from 2015 to
2020.
 The main target of the company has been depicted in terms of the initiatives taken by
the company pertaining to allocating 30% of the management positions to be held
women’s
Overall Conclusion
The company has stated about various sources of the information pertaining to the
information associated with the injury rate and role of women in management positions. In
addition to this, there is considerable amount of disclosure pertaining to the initiatives taken
by the company to allocate noteworthy position to be held by women. Due to large variety of
information available pertaining to social initiatives this disclosure can be depicted as good.
External Drivers: Technical
Reporting Extract: Page 58

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Reporting
Critique
There has been
significant portion
of information
stated with the
disclosure of
Global
Technologies.
Accessibility
The information on the Global Technologies is stated under page 58 of the annual
report.
Comprehensiveness
Global Technologies is depicted with an organic growth of 7%. The acquisition and
the divested units are seen to be pertaining to the contribution of 5% of sales pertaining to the
technological initiatives. The contribution of global technology in the operating income has
been represented with a contribution of 15% pertaining to the global technologies.
Overall Conclusion
It can be concluded that there is very less information pertaining to the disclosure of
technology. Therefore, such an information can be depicted as ugly.

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Strategy: Strategy objectives
Reporting extract: Page 6
Reporting Critique
The various types of strategy frameworks are outlined in value creation section. This
is included under the vision of the company.
Accessibility
The value creation strategy section can be accessed in the page 6 of the annual report.
Comprehensiveness
 The overall strategic direction for the growth of the company is identified with
enhancement in security and product driven offering which are focused on customers.

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 The market present strategy is depicted with the increasing growth for the core
businesses, new markets and segments.
 The product leadership aspect is considered with continuous development of
innovative product offerings which are based on lowering the overall cost of
production and enhanced offering to the customers.
 The cost efficiency factor relates to the pleasing the cause base along with ensuring
improved processes which will be able to bring flexible final assembly to provide
better production services in low-cost countries.
Overall Conclusion
There are large number of initiatives taken by the company pertaining to market
presence, product leadership and cost efficiency in terms of strategy objectives. Therefore,
such a declaration of information is seen as good.
Strategy: Business model
Reporting extract: Page 8

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Reporting Critique
The important consideration of business model for the company can be identified with
formulation of Value creation for all stakeholders’ model.
Accessibility
ASSA ABLOY’s value-creating model can be accessed in page 8 of the annual report.
Comprehensiveness

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The value creation model as the segregated into six broad headings. This includes
 Achievement of overall strategy direction based on product leadership, cost efficiency
and market presence
 Strong presence with resources in terms of financial capital, strong brands, efficient
production and cost-effective suppliers
 The external factors used needs to be considered with automation, growing security
needs, sustainability, organisation and digitisation
 The important activities of ASSA ABLOY are further based on marketing services,
advisory services, innovation and product development along with sourcing and
manufacturing
 Another important component of value creating model analysis can be identified with
the stakeholders which includes society, employees, customers, suppliers and partners
Overall Conclusion
It can be overall concluded that there have been significant disclosures pertaining to
business model which have stated about overall value creation pertaining to security,
convenience, safety and profitable growth. Therefore, such a disclosure can be identified to
be good in nature.
Strategy: Governance
Reporting extract: Page 36

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Reporting Critique
The reporting of adequate disclosure pertaining to governance can be found under
sustainable development. There is also sufficient disclosure of corporate governance.
Accessibility
The governance under sustainable development can be sourced from page 36 of the
annual report. The information on disclosure of corporate governance can be seen in page 46
of the annual report.
Comprehensiveness
The various nature of responsibility pertaining to operational sustainability is defined
among the code of conduct associated to the business partners which is inspired with several
types of sustainability commitment prepared with GRI standards code. The corporate
governance structure has been clearly demonstrated by the company in terms of shareholders,
Gen meeting, nomination committee, CEO, audit committee, executive teams and other
divisions. The governance aspect is also defined with the preparation of the financial
performance report and statement of cash flows as per annual accounts act (PwC. 2018).

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Overall Conclusion
There is a vivid range of information available pertaining to role of governance in
terms of sustainability and reporting and consolidation functions. Henceforth, such a
disclosure can be considered as good.
Strategy: Risk
Reporting extract: Page 41
Reporting Critique
The important nature of disclosures pertaining to risk management is considered
under the report prepared by board of directors. In addition to this, the company has

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segregated strategic risk, operational risk and financial risk under significant risk
management heading.
Accessibility
The significant risk management framework can be accessed in page 41 and 42 of the
annual report.
Comprehensiveness
 The strategic risk options have been defined with country specific risk, competitors,
brand positioning, reputational risk and behaviour of the customers
 the operational risk aspects have been identified by the company in terms of
acquisition of a new business, insurance risk, risk pertaining to internal control, tax
risk and restructuring measures
 The financial risks are signified with currency risk, credit risk and risk associated with
pension obligations (PwC. 2018)
Overall Conclusion
It can be depicted that there is a wide range of information available in terms of
strategy crisp domains, financial risk and operational risks. Therefore, such lucidness in the
information is good in nature.
Strategy: Remuneration
Reporting extract: Page 55

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Reporting Critique
The important scope of information available for the remuneration can be identified
with Remuneration guidelines to senior management. The company has also stated the
remuneration provided to the board of directors. In addition to this, there is a significant
information pertaining to remuneration committee.

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Accessibility
Remuneration guidelines to senior management can be found under page 55 of the
annual report. The information on remuneration committee and remuneration for the board of
directors can be found under page 49 of the annual report.
Comprehensiveness
The important duties under the remuneration committee have been considered with
drawing up the remuneration for senior management and preparation of proposals which
evaluates matters associated to bonus, pension, severance pay and salaries. The minutes to the
remuneration committee is also prepared as per the negotiations and evaluations in matters
pertaining to pension, bonus and salaries. In addition to this, the board of directors of the
company have proposed the guidelines for the remuneration as per the employment
conditions of President and CEO along with other members of ASSA ABLOY Executive
Team. The total expenses pertaining to the remuneration of the executive team is included
under the several types of previous commitments but not yet reported (PwC. 2018).
Overall Conclusion
Despite of the considerable expanse of information disclosed with the remuneration
guidelines to the senior management and immigration for the board of directors there is still
scope for improvement. Therefore, such a disclosure of information is identified as ugly.
Resources and Relationships: Financial Assets:
Report Extract: Page 92:

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Report Critique:
The characteristics of reporting that determine the financial asset framework element:
a. Values of the financial assets particularly the shares and interest
b. Foreign exchange forward funding
c. Financial health of the company
Extensiveness & Accessibility:
Apart from the other framework of the PWC, to access the information of the
financial asset is very easy. The company has mentioned regarding the financial assets in the
content page and has later provided a detailed description of the asset in the page 92. Assa

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Abloy has provided an extensive information on the policies governing the measurement of
the financial asset.
Comprehensiveness:
Under the notes section of financial instruments the company has treasured the policy
that aims to reduce the risk and make sure that it is able to maintain sufficient amount of
liquidity to conduct its business operations. Assa Abloy has provided information regarding
the derivative instrument hedge account and derivative instrument for trading account as
well. Assa Abloy has addressed regarding the currency swaps and indicators of the previous
performance.
Conclusion & Strength:
Assa Abloy financial assets is communicated in detail and inside the framework of
pwc reporting. Therefore the overall quality of reporting is good.
Resource and Relationship: Physical Assets
Report Extract: Page 78

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Reporting critique
The characteristics of reporting that determine the physical asset framework element:
a. Disclosing the book values of the property, plant and equipment
b. Disclosing the closing accumulated values
c. Providing disclosure of carrying amount and asset efficiency
Extensiveness & Accessibility:
Assa Abloy has declared regarding the techniques involved in the measurement of the
physical assets in the annual report. The information is easily accessible through the content
pages and under the notes sections. The accounting policies stated under the notes section
focuses on the new amendments made in the asset impairment methods.
Comprehensiveness:

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The reporting of the Assa Abloy property plant and equipment is much wide as it covers
the following
a. Techniques of valuing assets
b. Accumulated depreciation and amortization schedules under notes section
c. Exceptions involved in the default techniques
Conclusion & Conclusion:
In regard to the Assa Abloy physical asset reporting the company quality of overall
presentation can be termed as good for the readers.
Resource and Relationship: Customers
Report Extract: Page 4
Reporting critique
The characteristics of reporting that determine the Customers framework element:
a. Share of customers and the breadth of the customer base

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b. Customer revenue in terms of group sales regions
c. Relationship with the vital customers
Extensiveness & Accessibility:
Assa Abloy as the global firm has not provided a detailed information regarding the
number of customers. The company has only provided information relating to the
geographical segments and percentage share of group.
Comprehensiveness:
More widely speaking, the comprehensiveness regarding the geographical segments is
very much extensive but lacks specific country wise targets and comparative view of the
customer revenues.
Conclusion & Strength:
As it is anticipated Assa Abloy has not provided much of the information regarding
the customer. The only relevant information is geographical wise distribution of customer
share. The overall quality of reporting is for customers of Assa Abloy is bad.
Resource and Relationship: People & Culture
Report Extract: Page 37

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Reporting critique
The characteristics of reporting that determine the People & Culture framework element:
a. Extent of workforce capability
b. Different level of women in the organization
c. Development and career growth
d. Organization culture involving the way the workforce think regarding the company,
co-operation and communication
Extensiveness & Accessibility:
Under the heads of the sustainable development stated under page 36 Assa Abloy culture
and people is easily accessible. This includes the following;

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a. The gender diversity of Assa Abloy and levels of management position
b. Gender diversity goals that recognizes the women internally and externally
c. Company ethics towards responsible discharge of duties
d. People development through connected organization policy
Comprehensiveness:
The company has provided the wide breath of reporting regarding the people and
culture. Both the qualitative and quantitative aspects of the reporting is stated in the annual
report.
Conclusion & Strength:
The reporting aspects of Assa Abloy People and Culture is wide which covers strong
safety culture. Therefore, Assa Abloy overall quality of reporting is good.
Resource and Relationship: Innovation – G&S
Report Extract: Page 2
Reporting critique
The characteristics of reporting that determine the Innovation G&S framework element:

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a. Innovation in product development
b. New development in innovation and wider range of products and services
Extensiveness & Accessibility:
Assa Abloy continues to be the global leader in the innovation it is markedly
expressing its business strategy through extensive communication regarding the innovation
undertaken for quality products and services.
Comprehensiveness:
The company has only made qualitative references only and the report does not
provide any improvement in the internal system. The report also lacks depth in providing
information on forecast benefit.
Conclusion & Strength:
The importance of innovation is expressed strategically but quality of reporting lacks
coverage. Hence the overall quality of innovative reporting is ugly.
Resource and Relationship: Brand & Intellectual Assets
Report Extract: Page 1

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Reporting critique
The characteristics of reporting that determine the Brand & Intellectual Assets framework
element:
a. Building brand reputation
b. Use of intangible assets
c. Creating brand protection
Extensiveness & Accessibility:
Assa Abloy being the innovating oriented company has provided very little
information on the brands recognition and intellectual assets. The company in the
introduction part has made reference to the number of brands and the reporting diminishes in
the depth of the report.
Comprehensiveness:
The research and development and intellectual property does not covers much of the
performance details. The company has only talked about brands that are leaders in the market
segments. It does not includes any values or trends.
Conclusion & Strength:
Assa Abloy overall reporting of Brands and Intellectual Assets is ugly.
Resource and Relationship: Processes & Supply Chain
Report Extract: Page 14

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Reporting critique
The characteristics of reporting that determine the Processes & Supply Chain framework
element:
a. Distribution channels for the security market
Extensiveness & Accessibility:
The company has provided very less amount of information regarding the processes
and supply chain. The supply chain of Assa Abloy includes explanation regarding the internal
process. The company makes an extensive reference regarding the distribution channel and
distribution partners being the key drivers of business but lacks substantial reporting any
substance.
Comprehensiveness:
The comprehensiveness of Assa Abloy Processes and Supply chains includes the following

31MANAGERIAL ACCOUNTING
a. Increasing value creation in distribution
b. Specification regarding advice and digital tools
c. Extent of operational capital
d. Number key suppliers of raw materials
Conclusion & Strength:
The overall quality of Assa Abloy Process & Supply chain reporting is ugly as there
are numerous metrics that may be incorporated by the company to add value to the users.
Performance: Operational
Report Extract – Page 4:
Report critique:
The characteristics of reporting that determine the operational performance framework
element:
a. Operating income in terms of the division
b. Delivery of the products in time

32MANAGERIAL ACCOUNTING
c. Satisfaction of the customers
d. Per unit information of cost
Extensiveness & Accessibility:
The performance indicators of the company is provided in detailed with greater level
of overview and internal management nature given in annual report.
Comprehensiveness:
The main performance indicators of the company is given under page 4 that
comprises of the following attributes:
Depth involved in the reporting Description of the performance measure
Definition of the KPI The computation involved in the
computation of the key indicators of
performance that is linked with the strategy
of the firm
Remark The key performance metrics of the
company is inside the framework of
reporting
2018 The company has set down the target to
significantly measure the performance
Linkage of the remuneration The impact of the key performance
indicators is calculated by using the bonus
plan

33MANAGERIAL ACCOUNTING
Conclusion & Strength:
Though the depth that is prescribed in the annual report of the PWC framework has
not been stated in the annual report of the company but Assa Abloy general reporting of the
operational performance can be termed good.
Performance: Economic Performance
Report Extract: Page 66
Reporting Critique:
The characteristics of reporting that determine the Economic performance framework
element:
a. The business has communicated the economic performance that comprises of the
financial statement, statement of comprehensive statement, expenditure statement,
consolidated balance sheet and the cash flow of the company.
b. Financial ratios
Extensiveness & Accessibility:
The financial performance of the Assa Abloy is widely communicated and reported in
the element of framework inside the yearly annual report. The vital economic performance of

34MANAGERIAL ACCOUNTING
the company is communicated in page 4 that effectively draws the attention of the readers
with supporting segments of the accounts and explanations are recorded under the accounts
notes. Commenting upon the financial ratios the definition of the key ratios and computation
of the ratio is performed slatternly in the report.
Comprehensiveness:
Each of the financial segments of the performance is listed by comparing the figures
of the current year with the previous year’s results. This allows the readers to understand the
trend in the performance. Assa Abloy however lacks the depth as they have failed to provide
the readers with the comparison regarding the outcomes of the comparable firms. In order to
provide a better view to the readers of the financial statement the company has broken down
the additional information in the notes sections. This includes;
a. Breaking down the revenue of the products
b. Adjustment to the financial figures reported
c. Geographical break down of the revenues
d. Information to support the acquisition made by Assa Abloy
Conclusion and Strength:
Assa Abloy economic performance has been clearly articulated which is prominent
with the report. It provides the readers with the vision of business performance that is be
supported by the financial ratios. The overall quality of the presentation of Assa Abloy
economic performance is good.
Performance: Social Performance:
Report Extract: Page 7:

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Reporting Critique:
The characteristics of reporting that determine the Social performance framework element:
a. Values and outcomes that the business creates in relation to the social performance
Extensiveness & Accessibility:
The social performance of the company has been one of the main factors that is
reported in the Assa Abloy annual report. It also includes the wider part of the corporate
social responsibility of the company’s annual reporting.
Comprehensiveness:
The social performance of the company is reported under the five areas which
includes the following;
a. Assa Abloy reports regarding the health and safety with focus on connecting the
company’s performance with the culture
b. Recording of the injuries and the number of accidents that took place.
c. The people includes the culture and the inclusive environment of the business
d. Gender diversity regarding the number of women working in the business
e. Women management principles with the target of having 30% management position
opportunities to women

36MANAGERIAL ACCOUNTING
Conclusion and Strength:
The company has exclusively incorporated the total number of elements inside the
corporate social responsibilities to in order to reflect the ability of the company’s
commitment towards the social performance and transparency. Assa Abloy overall quality of
social reporting is good.
Performance: Environmental
Reporting Extract: Page 7:
Reporting Critique:
The characteristics of reporting that determine the Environmental performance
framework element:
a. Sustainability initiatives that is taken by the business towards delivering
environmental performance

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Analysis & Accessibility:
Just like the social element, Assa Abloy reporting of the environment effect is
incorporated by the company in the social responsibility report. One of the most vital
environmental reporting is integrated sustainability reporting for its certified products. A
graphical review is presented by Assa Abloy that aims to reduce the green houses by 20% in
2020.
Comprehensiveness:
The company has reported on the below stated vital main areas
a. Qualitative and quantitative view of the greenhouse gas emission
b. Environmental impacts of the company’s manufactured products
c. Assa Abloy’s impact on the manufacturing operations that it has on the environment
including the target reduction in the emission of green house
d. Sustainable and smart climatic solutions to achieve the energy and sustainability
targets
Conclusion and Strengths:
Assa Abloy has focussed exclusively in its annual reporting regarding the sustainable
greenhouse emission and target set down to reduce the emission in future. The overall quality
of environmental reporting is good.
Performance: Segmental
Reporting Extract: Page 59:

38MANAGERIAL ACCOUNTING
Reporting Critique:
The characteristics of reporting that determine the Segmental performance framework
element:
Segment wise performance- Assa Abloy has presented its segmental performance by
breaking down the revenues derived geographically and has placed its focus in the internal
value creation and operation performance.
Accessibility and Extensibility:
Assa Abloy segmental performance is communicated extensively in the annual report
both in terms of the qualitative and quantitative all through the annual report. The
performance of each segments is communicated namely the EMEA, America, Asia Pacific,
Global Technologies, Entrance System and Others.
Comprehensiveness:
Depth involved in reporting Explanation of the focus
Key performance indicators a. Growth in the revenue
b. Growth in the net income

39MANAGERIAL ACCOUNTING
c. Earnings before interest and tax
d. Cash flows
e. Operating cash flows
Market trends and drivers of growth Quantitative drivers of vital growth
Geographical trends Underlying drivers of the global growth
Strategy Connecting the strategy of the company
Outlook Long term future growth opportunities and
sustainable business
Conclusion & Strength:
The details stated in the Assa Abloy annual report regarding the segmental
performance offers an insight to the readers regarding the company’s segment wise
performance. The quality of Assa Abloy segmental reporting is good.
Materiality
Materiality is defined as disclosure of significant information which consists of
specific financial information which are important for decision-making of a user. Moreover,
the company reports the financial statements as per materiality in case of absence of
information pertaining to decision-making. This is important to be considered for decision-
making as per fairness and honesty. Every company chooses a different set of methods for
reporting of materiality depending on the nature of business, the size of business and the
culture followed by the company. There are several indications while choosing of the
materiality aspect by a company. There can be significant nature of information which can

40MANAGERIAL ACCOUNTING
impact on the investors were making the decisions pertaining to company’s values (PwC.
2018).
Reporting extract: Page 99
Report Critique
The significant scope of information pertaining to materiality for ASSA ABLOY is
defined with procuring reasonable assurance whether the financial statements are free from
material misstatements. The company has further stated in its annual report that these
misstatements can arise as a result of any error or fraud. As per the significant nature of the
professional judgement, the quantitative thresholds of materiality are included under scope of
audit which is seen with nature, timing and extent of application of audit procedures for
evaluating the impact of misstatements on both financial statement and aggregate. Similarly,
there is also a significant portion of information which is related to disclosure of the key audit
matters. Moreover, based on the risk pertaining to the key audit matters, the company has

41MANAGERIAL ACCOUNTING
made several provisions for reconciling the parameters including calculations done against
the supporting documents and examination of the minutes (PwC. 2018).
Conclusion
It can be discerned that there is significant nature of information revealed as per the
external and internal context in the financial statement. Based on the external drivers there is
a considerable amount of information declared in terms of competitive strategy, regulatory
framework, economic and social disclosures. Similarly, under the strategy initiatives the
company has demonstrated ample disclosures for strategy objectives, business model,
governance and risk factors. Similarly, under resources and relationships the most significant
disclosures can be identified with financial assets, people and culture. The shows the
effectiveness of company in depicting information pertaining to organisational health in
terms of internal context. Lastly, it is worth mentioning that the performance factors have
been duly noted by the company in terms of operational disclosures, economic disclosures
and social disclosures. Therefore, the overall assessment of information in the annual report
can be said to be good in nature as per the PWC value framework.

42MANAGERIAL ACCOUNTING
References
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