Information perspective and determinants of proportionate consolidation in Italy. An ante IFRS 11 analysis

In the frame of the positive accounting theory, the article investigates if strategic, debt contract and political cost determinants affect the managerial choice to account for interests in joint controlled entities. By means of an ante IFRS 11 analysis, we question if Italian venturers prefer the proportionate consolidation rather than the equity method with the aim to accomplish the information perspective. Results confirm that strategic and debt contract motivations drive the managerial choice of the proportionate consolidation. The study has implications for scholars, practitioners and regulators as we address the international academic and standard setting debate by providing results that do not support the IASB decision to remove the proportionate consolidation.