Professor Richard C. Jones, PhD., CPA

Rather than attempting to define the term “business model” and failing miserably by the way, I suggest that, in defining it, the Board consider: 1) The nature of the business entity, i.e. for-profit, not-for-profit, rate-regulated, etc. 2) The primary way in which an entity generates and expends its resources, 3) The major industry or industries in which an entity classifies itself, and 4) Management’s expectations about the manner by which the entity will grow its earned equity. In a different context, I guess the factors considered in developing criteria for determining a foreign subsidiary’s functional currency, in accordance with IAS 21, address similar issues, i.e. what is the foreign subsidiary’s main products and services, how does it spend its resources in support of those products and services, how are its activities funded or financed, etc.

Securities and Exchange Board of India-SEBI

The scope of the term “Business Model” should be defined and should consider “Substance over Form” approach for the definition.