Integrated Reporting as a Tool for Business Valuation under Concession Arrangements

Concessions directly impact value creation for the private partner, the state, and society as a whole. Ensuring a balance of interests requires transparency throughout the entire period of a concession arrangement's implementation. In this context, concessionaire reporting may become one of the most effective tools for improving communication between government, business, and the public. This article aims to explore the theoretical foundations, regulatory framework, and practices of reporting on the implementation of concession arrangements as a basis for assessing value creation for the state, private partner, and society, and to justify the appropriateness of using an integrated reporting format for this purpose. General scientific and specific methods present the research methodology, including analysis and synthesis, induction and deduction, identification of cause-and-effect relationships, systematization, and generalization. The article analyses the economic nature of concession as an instrument for value creation, existing reporting requirements for both grantors and concessionaires, examples of concessionaire reports from various countries, and financial and non-financial reporting capabilities. These elements are critically assessed within the given context. The research findings show that international financial reporting standards and sustainability disclosure standards introduced by the IFRS Foundation and the European Parliament do not adequately reflect a company's ability to fulfil long-term obligations under a concession arrangement. It is argued that integrated reporting is the most appropriate format for presenting information on the outcomes and future prospects of concession projects, as it covers financial, social, environmental, and governance aspects, allows assessment of the impact of concessions on all six capitals of a company, and demonstrates the concessionaire's actual ability to create value in the short, medium, and long term. This study fills a research gap in reporting on the implementation of concession arrangements from the perspective of value creation management. For the first time, it substantiates the relevance of integrated reporting for concessionaires as the most suitable approach to meeting the information needs of investors, the state, and society.