The impact of COVID-19 on financial statements results and disclosure: First insights from Italian listed companies

In March 2020, given the extended and dangerous nature of the Covid-19 virus, the Italian government issued measures geared towards containing the effect of the pandemic, thereby identifying the national territory as a protected area and limiting the movement of people. This had great repercussions on the productive activities of businesses, which were forced to suspend production. Strong uncertainties, tied both to the time frame, as well as to the impact of Covid-19 on micro and macroeconomic levels, have made it extremely difficult to forecast what future outcomes might be in the short term, that is to say, it is related to the year 2020, and, specifically, on assumptions regarding the future operations of companies. This manuscript proposes a study of financial reporting, as required by accounting standards, which listed companies must provide in regard to disclosure due to Covid-19 as well as in regard to being a going concern. After having examined the main measures adopted by the Italian government, and after having outlined the existing literature on the relevance of the accounting information, an investigation is undertaken to analyze if the companies demonstrated, or failed to demonstrate, consistency in the reporting on future performance, by means of a comparison of what was represented in the financial statements for the year ended on December, 31, 2019, and the results actually achieved as of June, 30, 2020. It will be shown that negative judgments frequently emerge relating to future performance and that no critical issues attributable to going concern were found.