Corporate social responsibility disclosure and cash holdings

By | 2024-11-21T12:08:16+01:00 November 21st, 2024|

Giovanni Coppola, Michele Fabrizi, Marco Ghitti / Financial Reporting / 1-2024

Purpose: the demand for firms to disclose their corporate social responsibility (CSR) activities has risen steeply over the last two decades, pushing many jurisdic-tions to implement mandatory non-financial reporting. We exploit the European non-financial reporting directive (NFRD) to study how companies change their cash management policies in response to additional mandatory CSR disclosure requirements. Methodology: we adopted a difference-in-differences (DID) approach, which is designed to estimate causality between the mandatory adoption of the NFRD and firms’ cash holdings. We implemented a two-way fixed effect model in the context of mandatory disclosure and staggered adoption of regulation, in order to study how firms changed their cash holdings following the introduction of the NFRD. Findings: we find that firms increased cash holdings following enactment of the NFRD, which is in line with the theory that cash is held for precautionary reasons. The growth in cash holdings is not equally distributed, as it is less pronounced in firms that are in a high-investment phase. Our findings reveal that mandatory non-financial disclosure can have real effects. Originality/value: This research shows that, in the short-term, mandatory CSR disclosure can have real effects on cash holding. Long-term effects should be con-sidered further by future research. Practical implications (optional): Policymakers should consider that additional CSR requirements are costly to firms, and thus find mechanisms that induce firms to adopt these requirements despite their costs.

 

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The level of compliance with the Italian Legislative Decree No. 254/2016 and its determinants: Insights from Italy

By | 2019-09-27T10:36:51+02:00 September 27th, 2019|

Cantino Valter, Devalle Alain, Fiandrino Simona, Busso Donatella / Financial Reporting / 1-2019

The present research explores non-financial mandatory disclosure in Italy in light of the recent Italian Legislative Decree No. 254/2016 on “the disclosure of non-financial and diversity information”. The study pursues a twofold aim: first, it seeks to measure the level of compliance of non-financial information (NFI) with non-financial mandatory disclosure; and second, it seeks to identify which determinants favor higher compliance levels in the first year of the regulatory adequacy. To these ends, the study examines the non-financial 2017 statements of 50 listed Italian companies to test by means of a NFI Disclosure Score three determinants that could explain the level of compliance. The NFI Disclosure Score was set at 52.58%. Moreover, findings suggest that the type of reporting channels (stand-alone report or disclosure included in the Annual Report), the Guidelines Reporting Initiative (GRI) options chosen by the companies, and the presence of the Corporate Social Responsibility (CSR) Committee within the board all affect compliance levels. This study is one of the first research conducted on mandatory NFI disclosure providing indications for regulators and companies on how to improve NFI disclosure.

non-financial disclosure, mandatory disclosure, non-financial infromation, Italy, Directive 2014/95/EU

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Informativa sul tasso di attualizzazione nella stima dell’avviamento secondo lo IAS36: un confronto fra Italia e Paesi nordici

By | 2017-12-27T17:34:56+01:00 December 27th, 2017|

Liberatore Giovanni, Mazzi Francesco/ Financial Reporting, Riviste / Fascicolo: 4-2011

Il presente lavoro si focalizza sulla qualità dell’informativa obbligatoria sul tasso di attualizzazione nella stima a valore d’uso dell’avviamento. L’analisi compara un campione di società italiane con uno del Nord Europa, al fine di verificare se la qualità informativa risulti migliore in paesi che pongono maggiore attenzione sul capitale immateriale. Inoltre, si è inteso verificare se l’informativa aumenti in presenza di svalutazione dell’avviamento, evento più frequente nei periodi di crisi economica. I risultati ottenuti tramite la costruzione di un disclosure index e l’analisi di regressione supportano le ipotesi, mostrando che l’informativa aumenta se l’azienda appartiene ad un paese nordeuropeo; lo stesso effetto si ottiene in caso di rilevazione di impairment loss.

This paper studies the disclosure quality on the discount rate used in estimating value in use for goodwill under IAS 36. A sample of Italian firms was compared with one of North European firms to verify if mandatory disclosure quality is correlated with the importance given to intangible assets in these countries. This paper also tested the hypothesis that the disclosure level increases following a goodwill write-off, an event related to market uncertainty and financial crisis periods. The analysis was conducted by constructing a disclosure index and the regression results support the hypothesis, showing that the discount rate disclosure level used in estimating goodwill increases in a firm from the North European sample; the same effect is shown in the presence of an impairment loss. Key words: goodwill, mandatory disclosure, compliance, impairment test, IAS 36, intangible assets.

Keywords: goodwill, mandatory disclosure, compliance, impairment test, IAS 36, intangible assets

 

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