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. Studies on liquidity risk tend to link this risk to two main causes. As regards the liabilities, it is linked to the difficulty of meeting contractual obligations already undertaken or renewing continuity debts; as regards the assets, it is linked to the difficulty of liquidating investments already made without having to carry out uneconomic disinvestments. In international accounting standards we find that the notion is not uniform and tends to be more restricted than the theoretical one, so much so that in Italy 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 standards, on the basis of an empirical survey of companies listed in the "Star Segment of the Italian Stock Exchange", we verify: a) the information provided in financial reports; b) the level of compliance and depth of the optional reporting information; e) 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.
Liquidity risk reporting in italian companies listed in the "Star segment"
DEL POZZO, Antonio;LOPREVITE, Salvatore
2013-01-01
Abstract
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. Studies on liquidity risk tend to link this risk to two main causes. As regards the liabilities, it is linked to the difficulty of meeting contractual obligations already undertaken or renewing continuity debts; as regards the assets, it is linked to the difficulty of liquidating investments already made without having to carry out uneconomic disinvestments. In international accounting standards we find that the notion is not uniform and tends to be more restricted than the theoretical one, so much so that in Italy 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 standards, on the basis of an empirical survey of companies listed in the "Star Segment of the Italian Stock Exchange", we verify: a) the information provided in financial reports; b) the level of compliance and depth of the optional reporting information; e) 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.Pubblicazioni consigliate
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