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Disclosure indexes and compliance with mandatory disclosure—The case of intangible assets in the Italian market

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  • Devalle, Alain
  • Rizzato, Fabio
  • Busso, Donatella

Abstract

Disclosure of financial statements is an important topic both for investors and for preparers as disclosure allows investors to understand the application of the accounting principles used by companies. This research examines the 2010 financial statements under IFRS of 189 Italian listed groups and their compliance with mandatory disclosure on intangible assets and presents an in depth empirical analysis of the Italian market—that belongs to the Continental European accounting cluster. Different variables were tested to analyze the compliance with the mandatory disclosure such as size variables, performance variables, financial interest variables and market variables. Many studies on mandatory disclosure are based on one disclosure index method and results are affected by the different approaches used: Cooke's dichotomous approach, Partial Compliance method, weighted and unweighted. In this paper, the decision was taken to run all the previous methods: results show that the only significant variable for all Dscore indexes is the weight of interests on revenues and this result is a distinctive feature of the Italian market where the role of the banking systems is more important than in other countries.

Suggested Citation

  • Devalle, Alain & Rizzato, Fabio & Busso, Donatella, 2016. "Disclosure indexes and compliance with mandatory disclosure—The case of intangible assets in the Italian market," Advances in accounting, Elsevier, vol. 35(C), pages 8-25.
    • Handle: RePEc:eee:advacc:v:35:y:2016:i:c:p:8-25
    DOI: 10.1016/j.adiac.2016.04.003
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    7. Muath Abdelqader & Khalil Nimer & Tamer K. Darwish, 2021. "IFRS compliance in GCC countries: Do corporate governance mechanisms make a difference?," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(4), pages 411-425, December.
    8. Valter Cantino & Alain Devalle & Simona Fiandrino & Donatella Busso, 2019. "The level of compliance with the Italian Legislative Decree No. 254/2016 and its determinants: Insights from Italy," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2019(1), pages 113-143.
    9. Niclas Hellman & Jordi Carenys & Soledad Moya Gutierrez, 2018. "Introducing More IFRS Principles of Disclosure – Will the Poor Disclosers Improve?," Accounting in Europe, Taylor & Francis Journals, vol. 15(2), pages 242-321, May.
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