EVA (Economic Value Added) is the trademark used by an American consultancy firm, Stern Stewart & CO, to rename a performance measure that has been around for a very long time in the accounting literature – residual income. Under this concept of profit a company creates wealth only when the cost of capital, included the opportunity costs of shareholders funds, has been recovered. The objective of this study is to examine the theoretical foundations of EVA and its role as tool for monitoring and rewarding senior managers. Particular emphasis is given to the accounting adjustments and to the bonus bank proposed by Stern Stewart to align the interests of managers and shareholders, making the former behaving as owners.

The increasing demand for non-financial information about the sustainability of economic activities has led the EU legislator to introduce the Directive 95/2014 to foster the transparency and the comparability of Corporate Social Reporting (CSR). This paper reports the findings of a study into the views of preparers and auditors regarding specific features of the new regulation. In particular, the issues examined cover: i) the reasons that justify the regulation of CSR; ii) the scope of the CSR statement; iii) the reporting format of CS information, and iv) the assurance required. It is found that managers favour many of the developments introduced by the Directive. In particular, the Board responsibility for CSR is regarded as a fundamental step for the diffusion of social and environmental policies throughout the whole entity, both at the horizontal and the vertical level. Further, the flexibility in the content, in the reporting format and in the choice of the reporting standards is regarded as an efficient approach to discipline CSR.

Intellectual capital disclosure (ICD) has experienced a substantial increase in recent decades and many frameworks and guidelines have been issued to provide directions with regard to what constitutes “good” ICD. Companies can use Extensible Business Reporting Language (XBRL) to “build” their own intellectual capital (IC) reports. This digital format has both technical and operating characteristics suitable for reporting non-financial information. This paper reports the findings of a survey of the views of 37 Italian preparers on the scope, the taxonomy, and the assurance of IC reporting via XBRL. It was found that respondents favor the adoption of an IC reporting framework and the standardization of IC indicators. Preferences reveal uncertainty about the level of flexibility for tagging IC information, while supporting the main benefits of XBRL and indicating a marked inclination for tagged information certified by an independent audit. Overall, despite a low awareness of XBRL, the importance placed on standardization of IC information and on the usefulness of the comparability and the speed attribute of XBRL supports the appealing features of this language for developing IC reporting.

The insider trading and market expectation hypotheses have been proposed to explain the increase in share prices of target firms before their merger announcements. We focus on the market expectation hypothesis by using daily FT coverage as a proxy of a merger expectation and search for relevant articles for 1,059 UK target firms between 1998 and 2010, identifying a total of 1,240 rumour articles. We find that FT coverage can only partly explain the target price run-ups and therefore we support the alternative insider trading hypothesis.

We focus on the market expectation hypothesis to explain the increase in share prices and trading volume of target firms before their merger announcements that have conventionally been attributed to either insider trading or market expectation.We use Financial Times (FT) coverage as a proxy of merger expectation and search for relevant articles for 783 UK target firms between 1998 and 2010. We identify a total of 1049 rumour articles and find that the FT market expectation proxy explains a small percentage of the target price run-ups. Results are strong during the sample period, even though the magnitude for both returns and trading volume tends to decrease within recent years. There is also a strong contemporaneous relation between abnormal returns and trading volume. Unexplained increases in target prices and trading volume may be attributed to insider trading.

Disclosure on intangible assets – usually called intellectual capital (IC) - has experienced a substantial increase in the last decades and many frameworks and guidelines have been issued to provide directions on what constitutes ‘good’ IC disclosure. Companies can use XBRL to “build” their own IC report. It is assumed that the latter has both technical and operating characteristics suitable to represent intangible assets. This paper reports the findings of an Italian survey into the preparers’ views regarding the scope, the taxonomy and the assurance of IC reporting via XBRL. It is found that respondents favour the adoption of XBRL for developing IC reporting. The development of a global reporting framework is found useful. Preferences reveal uncertainty about the level of flexibility for tagging IC information, while indicate a marked inclination for an audit of tagged information certified by an outside party. Overall, despite a low awareness, XBRL appears to be regarded as an efficient driver to communicate and processing IC information.

L’analisi dei rischi aziendali e la loro rappresentazione nella comunicazione esterna d’impresa rappresentano un argomento complesso, oggetto di un continuo interesse da parte degli standard setter e delle autorità di controllo dei mercati mobiliari. Alla base di questa sensibilità vi è il convincimento che l’informativa di bilancio non consente di valutare in modo consapevole i rischi che le imprese si trovano a fronteggiare. Le continue turbolenze dei mercati dei capitali, insieme ai diversi dissesti di società quotate, hanno poi contribuito ad aumentare le aspettative dei mercati finanziari verso un’informativa di bilancio sempre più trasparente. In tale contesto, il lavoro propone un’analisi critica della letteratura nazionale ed internazionale sulla comunicazione economico-finanziaria d’impresa al fine di identificare le possibili motivazioni e i principi generali che dovrebbero ispirare la disclosure sui rischi aziendali. In secondo luogo, si offre un esame critico dei modelli di reporting proposti dagli organismi professionali, dal legislatore nazionale e dallo IASB al fine di fornire un quadro di riferimento per tutti coloro che sono interessati alle nuove disposizioni. Particolare enfasi è posta all’analisi dei rischi finanziari che rappresentano, a tutt’oggi, l’oggetto principale del risk reporting.

La comunicazione delle risorse intangibili viene intesa oggi come un elemento essenziale dell’informativa di bilancio per poter esprimere un giudizio consapevole sulle prospettive reddituali e finanziarie dell’impresa. Le conoscenze interne, come le competenze organizzative, quelle esterne, come la credibilità e l’immagine, insieme ai valori e alle conoscenze della componente umana, rappresentano le fonti principali del vantaggio competitivo d’impresa [Coda 2000]. Gli stessi Standard Setter e le prassi operative hanno compreso l’importanza di un’informativa extra-contabile sul Capitale Intellettuale (CI), proponendo diversi modelli di comunicazione esterna che allargano l’informativa di bilancio attraverso la relazione sulla gestione (IASB 2005) o con un report specifico (Skandia 1994). Benché la letteratura empirica abbia ampiamente esaminato la quantità e le determinanti della disclosure sugli intangibili, le specificità settoriali restano ancora oggetto di approfondimento sia sul piano operativo che teorico. Per colmare questa lacuna il presente studio esamina le società italiane del settore software e computer service con tre finalità: i) individuare la propensione di imprese knowledge intensive a fornire informazioni sul loro patrimonio immateriale; ii) determinare le componenti che maggiormente vengono comunicate; iii) estendere la presente letteratura empirica sull’utilità della comunicazione volontaria, esaminandone le caratteristiche qualitative.

Risk disclosures are fundamental to the efficient operating of capital markets, enabling investors to assess the risks and the uncertainties of companies in their portfolios. After corporate scandals and financial crisis, the demand for transparent risk disclosures has increased. Consequently, new regulations were introduced to widen the scope of risk reporting (AMD – Accounting Modernization Directive, 2003/51/EC requires companies to disclose their principal risks in management report), as well as to enhance the disclosure of financial risks (IFRS 7 – Financial Instruments: Disclosures determines new requirements for financial risks). The purpose of the paper is to analyze the effectiveness of reporting regulation on corporate risk disclosure by examining the information dimensions. In order to perform such an analysis, we carry out a detailed analysis on the annual reports of companies listed on five different stock exchanges (Euronext Paris, Deutsche Börse, Borsa Italiana, London Stock Exchange, and NYSE) over the period 2007-2010. The specific countries are due to their considerable differences in risk reporting regulations, ranging on national and supranational accounting standards and rules (Germany and US), to a mix of national guidelines and supranational regulations (France and UK), to disclosure based only on supranational regulations (Italy). Risk disclosure is examined by using content analysis. We develop a framework for the identification and measurement of risk information in corporate annual reports by considering the accounting standards, rules and guidelines issued by the national regulatory bodies and the reporting requirements introduced at supranational level. Given the country-based risk regulation diversity, we have expected to find significantly different risk disclosure. Our study demonstrates that some partial significant differences exist on the dimensions of risk disclosures over the countries. The results show that past, present and qualitative information is prevalent in each sampled country, and financial and non-financial information is balanced. We believe that the results emerging on this study could be of some interest, as in the previous literature just a few studies investigate the dimensions of risk disclosure by considering different corporate regulation reporting systems.

La normativa in materia di comunicazione dei rischi finanziari è stata oggetto negli ultimi anni di un vivacissimo fermento che ha portato all’introduzione di nuove informazioni che le società quotate devono fornire nell’ambito dei loro fascicoli di bilancio. In risposta a questo continuo interesse da parte degli standard setter, e alla diffusione di copiose relazioni sui rischi, si è sviluppata un’ampia letteratura che ha valutato le caratteristiche, i benefici e i limiti della disclosure sui rischi finanziari. Il presente lavoro intende contribuire al tale dibattito, estendendo l’analisi a due tipologie di rischio che non sono state ancora esaminate: il rischio di credito e quello di liquidità. Segnatamente, si intende valutare se le informazioni sul rischio di credito e su quello di liquidità, previste dal principio contabile internazionale IFRS 7 – Strumenti finanziari: informazioni integrative, sono effettivamente utili per gli analisti finanziari, in quanto consentano di esprimere giudizi più consapevoli sul profilo di rischio di una società. Prendendo le mosse da questi presupposti, il volume esamina, anzitutto, le principali metodologie che sono state impiegate, nell’ambito degli studi di financial reporting, per valutare l’utilità dell’informativa di natura contabile relativa alle tradizionali grandezze di reddito e di capitale. Successivamente, si propone una rassegna critica della letteratura sulla comunicazione dei rischi e si riportano, infine, i risultati dell’analisi empirica condotta con 38 sell-side analysts.

Nell’agosto del 2010 lo IASB e il FASB hanno pubblicato l’Exposure Draft (ED) “Leases” con l’obiettivo di modificare i criteri di contabilizzazione delle operazioni di leasing. I due Standard Setter prevedono di pubblicare, entro il 2012, un nuovo principio contabile che sostituirà lo IAS 17, Leases. Il nuovo documento richiede al locatario di applicare un unico modello contabile, il right of use model, per tutti i contratti di leasing e al locatore di scegliere tra due metodi di rilevazione alternativi: il performance obligation model, nell’ipotesi in cui il locatore conservi un’esposizione significativa ai rischi e ai benefici connessi al bene locato, e il derecognition model, in caso contrario.

Although the disclosure of corporate risks is considered as key information for sound investors’ decision making, recent research has shown that companies’ reporting practices are unhelpful, as they are generic and boilerplate. The current empirical evidence is based mainly on the information provided in the annual reports of listed companies, whereas research on risk disclosures in initial public offerings (IPOs) is still limited. This paper performs a quantitative and qualitative analysis of risk reporting within IPO prospectuses for a sample of six manufacturing and six information technology (IT) Italian companies. The aim is to provide further empirical evidence meaningful to regulators and accounting standard setters to: i) define ‘best practice’ for risk reporting and ii) to assess the extent to which industry affects risk disclosures. The level of risk information is measured by carrying out a detailed content analysis, based on a coding instrument comprising 76 risk categories and two type attributes (time and quantitative orientation), with each aspect of the risk information expressed in terms of lines. The findings indicate that prospectuses place significant emphasis on external risks, but neglect other sources of uncertainties. The comparison between the two industries shows that they share similar disclosure practices, with the IT companies disclosing significantly higher proportions of forward-looking and external risk information than the manufacturers.

In recent years, consulting firms and academics have developed a plethora of methods to place a monetary value on brands. The models used in practice either focus on product brands - the commercial trademarks used to target specific client segments, or on corporate brands - all the intangibles that come under an umbrella name. However, the current marketing strategies reveal that few companies use commercial brands and corporate brands separately, as they are typically integrated into complex brand architectures that combine product brands and corporate brands in different flavours. This study critically reviews the brand valuation literature to assist practitioners in choosing appropriate methods to estimate different brand architectures. The analysis is carried out applying the Brand Finance valuation process to two Italian wineries. The findings suggest that whenever wineries use strong umbrella brand strategies, it is feasible to bundle the product brands into one comprehensive brand. The latter can be measured either by splitting the incremental benefits from the core brand, as suggested by Anson (2000), or by assembling the core brand and the incremental benefits together, as proposed by the Excess Earnings Method. For integrated wineries producing high quality wines, it is proposed that brand strength analysis be combined with the relief from royalty method.