Adopting XBRL in Italy: Early evidence of fit between Italian GAAP Taxonomy and current reporting practices of non-listed companies

Abstract

Abstract. XBRL (eXtensible Business Reporting Language) will soon be the leading means of corporate financial reporting. A key feature of its adoption relies on well-defined standard taxonomies, which should adequately reflect both the accounting standards and the reporting practices of firms. This study considers this issue, following the concept of -taxonomy fit‖ proposed by Bovee et al. (2002; and Bonsón et al. (2009a). The aim is to fill a specific gap in the previous literature, by analyzing the applicability of XBRL in the context of template-based accounting standards. Specifically, we assess the fit between the XBRL Italian GAAP Taxonomy and the traditional annual reports of Italian non-listed companies, which are required to file their financial statements in XBRL. The results show an almost perfect fit but with significant differences among the financial statements analyzed. In addition, the degree of misfit, when it occurs, depends on the sector, the size and the level of disaggregation of information provided by the companies.

A case study of XBRL implementation and development at the Federal Deposit Insurance Corporation (FDIC)

“…In her reseach on XBRL adoption at two prominent British government agencies, Mousa (2010) emphasizes that there is a venue for future research to analyze the post-mandate impact after implementing XBRL to inform current and future regulatory adopters. Our study follows Mousa's suggestion and builds off of existing XBRL regulatory research (Bonson et al, 2007;Valentinetti and Rea, 2011;Troshani et al, 2018), by addressing the post-implementation stage through focusing on the development of technology at the adopting agency, its communications and consequent strategies associated with other agencies involved in the implementation, process changes made by two key constituencies: a filer bank and a software development company.…”

“…The particular XBRL implementation our case involves was mandated by the Federal Financial Institutions Examination Council's (FFIEC) Central Data Repository (CDR) modernization project, which consolidated all of its reporting agencies' metadata into a central, shared location. Valentinetti and Rea (2011) discuss the difficulty of an Italian regulator potentially "fitting" a reporting technology, XBRL, into its accounting system post-mandate. This issue is not limited to Italy/Europe.…”

“…Belgium and Spain) [3]. Furthermore, key decisions involving a closed taxonomy and developing the Inline XBRL-based ETS represent critical additions to the more publicized SEC and Italian mandates (Valentinetti and Rea, 2011) and provide important insights to future XBRL regulatory adopters.…”

Financial Reporting Practices of Italian SMEs: Why Do They Disclose More?

“…However, as time passes the filing errors of the companies decrease, suggesting a learning curve exhibited by the XBRL filers (Du et al, 2013). Issues and benefits of the XBRL taxonomy have been also widely analyzed in the Italian setting (Valentinetti and Rea, 2011;Valentinetti and Rea, 2012;Fradeani et al, 2017).…”

XBRL Extension to the Financial Statement Notes: Field-based Evidence on Unlisted Companies

“…The adoption of a common financial reporting taxonomy could enhance accessibility of financial reports, analysis of financial data, and comparison across companies (Debreceny and Gray, 2001). In such a scenario, the development of a common taxonomy for disclosure is a challenging issue (Sòstero, 2010;Panizzolo, 2010;Valentinetti and Rea, 2011) since tagging notes is a much more demanding task than financial statement items and it adds complexity in filings (Debreceny et al 2011). Thus, analyzing XBRL implementation to financial statement notes provides an excellent opportunity to assess the contribution of this open standard language to actually enhance corporate accounting information quality and standardization.…”