XBRL: An (Open) Source of Enlightenment or Disillusion?

Abstract

Extensible Business Reporting Language (XBRL) is being adopted by European regulators as a data standard for the exchange of business information. This paper examines the approach of XBRL International (XII) to the meta-data standard's development and diffusion. We theorise the development of XBRL using concepts drawn from a model of successful open source projects. Comparison of the open source model to XBRL enables us to identify a number of interesting similarities and differences. In common with open source projects, the benefits and progress of XBRL have been overstated and 'hyped' by enthusiastic participants. While XBRL is an open data standard in terms of access to the equivalent of its 'source code' we find that the governance structure of the XBRL consortium is significantly different to a model open source approach. The barrier to participation that is created by requiring paid membership and a focus on transacting business at physical conferences and meetings is identified as particularly critical. Decisions about the technical structure of XBRL, the regulator-led pattern of adoption and the organisation of XII are discussed. Finally areas for future research are identified.

The Impact of XBRL: A Delphi Investigation

“…Users want more flexibility, ease of use and timeliness in financial reporting (FASB 2000; CICA Along with all these mandates and calls for the use of XBRL, even more numerous predictions have appeared of the radical impacts its adoption will have on business and the accounting profession (Cohen 2005, Trites 2004, Wagenhofer 2003, Coffin 2001a& 2001b. However, some have suggested that interest in this type of technology is low (Xiao et al 2002) and others have cautioned against overstatement and over hype by XBRL enthusiasts (Locke and Lowe 2007). Unfortunately, these predictions have been supported by little research investigating the probability of future XBRL impacts.…”

Towards an XBRL-Enabled Corporate Governance Reporting Taxonomy: An Empirical Study of NYSE-Listed Financial Institutions

“…By standardizing the form in which financial data are exchanged, XBRL can integrate information flows within communities of diverse organizations that can generate enormous efficiencies (Deshmukh, 2004;Debreceny, 2007;Locke and Lowe, 2007;Pinsker and Li, 2008). Furthermore, XBRL has the advantage that it is extensible, particularly as it enables the addition of specific features and thus enhances its usability without replacing existing accounting standards (Locke and Lowe, 2007;Boritz and No, 2008). The next section gives an overview of existing theories with regard to the usage and diffusion of XBRL.…”

“…According to the research article from Locke and Lowe (2007), advocacy of individual participants can have a positive effect in achieving the critical mass of diffusion. However, in the example of XBRL, the authors blame highly exaggerated comments such as the claim that XBRL will "have consequences similar to the transition from paper and pencil to the use of spreadsheets" (Covaleski, 2000) with regard to XBRL, which created conflicts and excessively high expectations.…”

“…It is used end-to-end within the process of financial reporting and mainly enables the seamless electronic interchange of corporate disclosures between different electronic networks (Troshani et al, 2014). By standardizing the form in which financial data are exchanged, XBRL can integrate information flows within communities of diverse organizations that can generate enormous efficiencies (Deshmukh, 2004;Debreceny, 2007;Locke and Lowe, 2007;Pinsker and Li, 2008). Furthermore, XBRL has the advantage that it is extensible, particularly as it enables the addition of specific features and thus enhances its usability without replacing existing accounting standards (Locke and Lowe, 2007;Boritz and No, 2008).…”

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

“…According to Locke and Lowe (2007), the acceptance of taxonomies is a relevant challenge for the successful development and diffusion of XBRL. 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.…”