Continuous disclosure refers to the obligation for swiftly disclosing novel and significant information about a listed company, when the information is available. The periodic disclosure requires the disclosure documents to be prepared half-yearly or annually. Material information is the information, which is capable of having a material impact on the share price of a company. This includes information such as, possible disruption to business due to a natural disaster, alteration in the key operation and strategic imperatives or the agreement of a contract with an essential supplier.
One of the main differences amid the two disclosures is that the periodic disclosure is sporadic and allows that the information is polished and issues of disclosure are assessed over a suitable time period subsequent to the pertinent date of closure of the financial statements. In contrast, there is promptness in the continuous disclosure that results in a requirement for making rapid decisions of disclosure (Golding, 2006)
In the continuous disclosure, it is required that the companies make immediate disclosure to the public regarding the material information by means of formal channel that can be equally accessed by all interested stakeholders. In contrast, periodic disclosure requires that a particular set of information be released by the company at standard time-period, such as, quarterly and annual reports (Talosaga, et al., 2011)
The periodic disclosures raises the compliance costs for the company, while the continuous disclosure is needed as and when the need be. The periodic reports, like annual reports, offer the company’s shareholders and the prospective investors with significant information that includes financial information, like, the audited financial statements. Even though the continuous disclosure as well produces such information, they might sometimes be unaudited reports because they have to be published as and when required.