Telling the story of a company through financial statements
The topic of explanatory notes and their effectiveness
A company’s story is also told through its the financial statements, and not just with numbers. Transparency is therefore important, as is a history of careful commitment to production, with robust accounts and care for those who work in the company being protected. After all, the purpose of the ‘explanatory notes to the financial statements’ is expand upon the traditional financial statements and provide a qualitative overview of the company’s past and future performance. Antonio Accetturo, Audinga Baltrunaite, Gianmarco Cariola, Annalisa Frigo and Marco Gallo (all economists at the Bank of Italy) examined the meaning and effectiveness of these documents in an analysis that led to the publication of a study in the Topics for discussion series. ‘Il valore delle parole: l’impatto dell’informazione non finanziaria sulla performance delle imprese
(The value of words: the impact of non-financial information on the performance of companies) is the title of the analysis that aims to investigate the effects of explanatory notes on the valuation and perception of companies within the economic system. And this perception includes corporate reputation.
In order to reduce administrative burdens, a simplified financial statement for micro-enterprises (micro-financial statements) was introduced in 2016, eliminating the obligation to submit explanatory notes. Accetturo and his colleagues carried out a detailed analysis of the before and after effects of the change and highlighted two outcomes. Firstly, the research points out that the adoption of micro-financial statements has not led to a significant decrease in costs incurred by companies. On the other hand, simplification has had a negative impact on companies’ ability to access external financing and has slowed the process of acquiring company shares by new shareholders, probably due to the reduction in available information. In other words, without explanatory notes, a company’s reputational narrative seems to have lost its effectiveness. It would almost seem that an important part of companies’ production culture has been lost amid excessive numbers and insufficient words.
Il valore delle parole: l’impatto dell’informazione non finanziaria sulla performance delle imprese
Antonio Accetturo, Audinga Baltrunaite, Gianmarco Cariola, Annalisa Frigo and Marco Gallo
Bank of Italy, Topics for Discussion, No 1498, October 2025
The topic of explanatory notes and their effectiveness
A company’s story is also told through its the financial statements, and not just with numbers. Transparency is therefore important, as is a history of careful commitment to production, with robust accounts and care for those who work in the company being protected. After all, the purpose of the ‘explanatory notes to the financial statements’ is expand upon the traditional financial statements and provide a qualitative overview of the company’s past and future performance. Antonio Accetturo, Audinga Baltrunaite, Gianmarco Cariola, Annalisa Frigo and Marco Gallo (all economists at the Bank of Italy) examined the meaning and effectiveness of these documents in an analysis that led to the publication of a study in the Topics for discussion series. ‘Il valore delle parole: l’impatto dell’informazione non finanziaria sulla performance delle imprese
(The value of words: the impact of non-financial information on the performance of companies) is the title of the analysis that aims to investigate the effects of explanatory notes on the valuation and perception of companies within the economic system. And this perception includes corporate reputation.
In order to reduce administrative burdens, a simplified financial statement for micro-enterprises (micro-financial statements) was introduced in 2016, eliminating the obligation to submit explanatory notes. Accetturo and his colleagues carried out a detailed analysis of the before and after effects of the change and highlighted two outcomes. Firstly, the research points out that the adoption of micro-financial statements has not led to a significant decrease in costs incurred by companies. On the other hand, simplification has had a negative impact on companies’ ability to access external financing and has slowed the process of acquiring company shares by new shareholders, probably due to the reduction in available information. In other words, without explanatory notes, a company’s reputational narrative seems to have lost its effectiveness. It would almost seem that an important part of companies’ production culture has been lost amid excessive numbers and insufficient words.
Il valore delle parole: l’impatto dell’informazione non finanziaria sulla performance delle imprese
Antonio Accetturo, Audinga Baltrunaite, Gianmarco Cariola, Annalisa Frigo and Marco Gallo
Bank of Italy, Topics for Discussion, No 1498, October 2025