XBRL: An Impacts Framework and Research Challenge

Abstract

This article discusses XBRL, its impacts on users and on the characteristics of financial information, and provides an impacts framework for XBRL. XBRL will both simplify disclosure and ease the communication of financial information to users, analysts, and regulators via the Internet. The potential impacts that XBRL is expected to have on users, accountants, regulators, and the financial communication process are addressed. Research on XBRL is examined and future research directions and priorities are identified. A more rigorous look at the myriad range of potential impacts of XBRL is needed.

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

“…Debreceny et al (2005) discuss a series of research implications of the development of XBRL taxonomies; specifically, they focus on the completeness of taxonomies, the factors that determine the adequacy of standard taxonomies and the role of extensions in the standard taxonomies. Baldwin et al (2006) outline the potential impacts of XBRL on the quality of financial information in terms of a series of relevant characteristics 2 : consistency and comparability, reliability and accessibility, relevance, decision usefulness and transparency. They argue that XBRL may improve the quality of financial information by virtue of well-defined standard taxonomies and a radical increase in the degree of automation facilitated by those taxonomies.…”

“…Therefore, the taxonomies should be able to accommodate financial reporting practices to meet user demands at the country, industry or firm level (Debreceny and Gray 2001;Bovee et al 2005;Debreceny et al 2005;Baldwin et al 2006). …”

The Process Of Creating XBRL Instance Documents: A Research Framework

“…With XBRL, information preparers may lower report preparation costs and produce more reliable financial information due to reduced data entry work (Baldwin et al 2006;Stantial 2007). XBRL tags allow information users to search for and integrate key financial information quickly (Hodge et al 2004).…”

“…In addition, with XBRL tagged information, users can perform multiple financial analyses without manually re-entering information (Baldwin et al 2006). Finally, XBRL may benefit both information preparers and users by facilitating the electronic sharing of financial information (SEC 2005 1 Other barriers to widespread XBRL adoption, such as quantifiable benefits to adopters (e.g., what tangible benefits will XBRL adopters receive (Baldwin et al 2006), and legal issues (e.g., will regulatory agencies mandate XBRL usage (Debreceny et al 2005)) are beyond the scope of this study. 2 Financial statements filed with the SEC are generally audited whereas the SEC does not require companies to audit furnished statements (SEC 2008a).…”

“…Proponents of extensible Business Reporting Language (XBRL) claim that the business world is currently witnessing a financial reporting revolution fueled by the capability of XBRL to allow corporate financial information to be aggregated, transmitted, and analyzed quicker and more accurately (Hoffman and Baldwin et al 2006). Academic researchers argue that XBRL will help nonprofessional financial statement users acquire and integrate financial information when making investment decisions (Hodge et al 2004).…”