Liquidity risk reporting in the financial statements of listed non-finance companies in Italy

The recent crisis in the financial markets has brought liquidity risk into the spotlight. In doctrine, liquidity risk concerns a temporary difficulty in guaranteeing appropriate liquidity for the operation of corporate processes. In international accounting principles, when considering the various reference sources (IFRS, OIC and the Italian Civil Code), we find that the notion is not uniform and tends to be more restricted than the theoretical one, so much so that the supervisory authorities (CONSOB, Banca d’Italia, Isvap) have recently felt the need to provide operational indications on the minimum information content required in reporting. In this paper, after describing the principal meanings attributed to liquidity risk in accounting principles and the points of consensus and differences between the various regulatory sources, on the basis of an empirical survey of companies listed in the “Star Segment of the Italian Stock Exchange”, we verify: a) what information is provided in financial reportings; b) the level of compliance and depth of the optional reporting information; c) whether there is a relationship between the economic-financial situation and the depth of their liquidity risk reporting. The results lead us to conclude that the information provided is of a low quality.