Financial and Sustainability Reporting: An Empirical Investigation of Their Relationship in the Italian Context

“Integrated reporting” has gained prominence during the last few years. Investors have required more information also about how sustainability issues and initiatives are expected to contribute to the long-term growth strategy of a business. This communication, which should be provided by top management, leads toward the convergence of sustainability and financial reporting into a single “narrative.” Both financial reporting and non-financial reporting together provide all stakeholders with a comprehensive view of the position and performance of a company. This process has also been encouraged by some European regulations. However, despite these, social and environmental information is still disclosed differently in consolidated annual reports and social–environmental reports. The present work focuses on such differences of content. The analysis regards both (mandatory) consolidated annual reports and (voluntary) stand-alone social–environmental reports prepared by Italian-listed corporate groups for two different accounting periods (both before and after the implementation of Directive 2003/51/EC). The final results show relevant and persistent differences in the disclosure of environmental and employee matters between financial and sustainability reporting

Value relevance of intangibles: A literature review

Value relevance can be defined as the association between accounting values and market values and it is one of the most important quality attributes of financial reporting. Recognizing, measuring, and reporting the intangible assets properly has become gradually more important due to the increasing importance of intangibles in the statement of financial position and the shift from a tangible-based economy to an intangible-based economy. Value relevance of intangibles examines how well accounting treatments of intangibles are related to stock market values and it is a controversial and heavily debated issue in the literature. Thus, the purpose of this study is to demonstrate how valuable intangibles and to provide useful information about the value relevance of intangibles by reviewing the most cited literature. For this purpose, the study investigates R&D expenditures, goodwill, patents, brands, and advertising expenditures by comparing the results of the studies. According to the results, while IFRS adoption is expected to provide more comparable and high-quality information, the overall value relevance of intangibles has generally declined after the IFRS. In addition, capitalizing the R&D expenditures seem to be more value relevant than the expensed portion. These results are also consistent with the other intangibles such as patents and brands. © Springer Nature Singapore Pte Ltd. 2021.2-s2.0-8509789079