ABSTRACT
Although the accounting literature demonstrates country- and firm-related factors drive disclosure in financial statements, whether transaction-specific features also affect the extent of disclosure is still unclear. In this paper, we examine such issues by investigating the association between the disclosures offered in mergers and acquisitions (M&A) and multiple determinants incidental to the M&A itself. Referring to the unique Italian setting, which shows high discretion and potential sensitivity toward disclosure, we document that acquirers increase disclosure for larger M&A and reduce disclosure for increasing M&A materiality and extreme amounts of goodwill recognized on the transaction. By disentangling mandatory and voluntary disclosure, empirical evidence shows that the latter is sensitive to more M&A-specific features than the former. Additional analyses and robustness tests support our main findings. The study contributes to the accounting literature by highlighting the importance to include transaction-specific features when modeling for transaction-related disclosure, and has practical implications for investors, standard setters, and regulators.
JEL Classifications: M40; M41.
