Disclosure indexes and compliance with mandatory disclosure-The case of intangible assets in the Italian market

Disclosure of financial statements is an important topic both for investors and for preparers as disclosure allows investors to understand the application of the accounting principles used by companies. This research examines the 2010 financial statements under IFRS of 189 Italian listed groups and their compliance with mandatory disclosure on intangible assets and presents an in depth empirical analysis of the Italian market-that belongs to the Continental European accounting cluster. Different variables were tested to analyze the compliance with the mandatory disclosure such as size variables, performance variables, financial interest variables and market variables. Many studies on mandatory disclosure are based on one disclosure index method and results are affected by the different approaches used: Cooke's dichotomous approach, Partial Compliance method, weighted and unweighted. In this paper, the decision was taken to run all the previous methods: results show that the only significant variable for all Dscore indexes is the weight of interests on revenues and this result is a distinctive feature of the Italian market where the role of the banking systems is more important than in other countries.