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The usefulness of the business model disclosure for investors’ judgements in financial entities. A European study

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  • Mechelli, Alessandro
  • Cimini, Riccardo
  • Mazzocchetti, Francesca

Abstract

The business model concept is a common topic investigated in different fields of research. To participate to the debate around such concept in the accounting field, the objective of this paper is showing whether and how the voluntary disclosure of the non-mandatory IASB (2010) macro-components, that we consider the key elements of a business model of financial entities, increases the value relevance of accounting amounts. Analyzing a sample of 124 European financial entities over the period 2010–2013, the paper shows that the value relevance of accounting amounts of entities that provide a wide disclosure of their business model is higher than the one of entities that provide a limited disclosure of their business model. These findings not only shed lights about the importance of disclosing information relating to the business model to improve the usefulness of accounting amounts for investors’ strategies, but also have implication for regulators and standard setters that from results could learn the opportunity to make the disclosure of IASB (2010) compulsory for all the IAS/IFRS compliant entities.

Suggested Citation

  • Mechelli, Alessandro & Cimini, Riccardo & Mazzocchetti, Francesca, 2017. "The usefulness of the business model disclosure for investors’ judgements in financial entities. A European study," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 20(1), pages 1-12.
    • Handle: RePEc:eee:spacre:v:20:y:2017:i:1:p:1-12
    DOI: 10.1016/j.rcsar.2016.03.002
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    3. Roberto Di Pietra & Stefano Zambon, 2022. "Book Review. Lorenzo Simoni, Business Models and Corporate Reporting: Defining the Platform to Illustrate Value Creation, Routledge, 2022 by Sam Rawsthorne," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2022(1), pages 167-172.
    4. Lorenzo Simoni & Stefan Schaper & Christian Nielsen, 2022. "Business Model Disclosures, Market Values, and Earnings Persistence: Evidence From the UK," Abacus, Accounting Foundation, University of Sydney, vol. 58(1), pages 142-173, March.
    5. Patrizia Di Tullio & Matteo La Torre & Diego Valentinetti & Michele A. Rea, 2021. "Toward performance measurement systems based on business models," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2021(suppl. 1), pages 97-122.
    6. Lorenzo Simoni & Laura Bini & Francesco Giunta, 2019. "The effects of business model regulation on the value relevance of traditional performance measures. Some evidence from UK companies," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2019(1), pages 83-111.

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    More about this item

    Keywords

    Business model; Value relevance; Financial entities; Ohlson model; European Union; Modelo de negocio; Importancia al valor; Entidades financieras; Modelo de Ohlson; Unión Europea;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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