Interoperability of XBRL Financial Statements in the U.S

In the wake of the global financial crisis, a pressing need exists for improving investor friendliness, especially the transparency and interoperability of the financial statements of public companies. eXtensible Business Reporting Language (XBRL) and XBRL taxonomies can accomplish this objective. I...

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Bibliographic Details
Published in:International journal of e-business research 2011-04, Vol.7 (2), p.19-33
Main Authors: Zhu, Hongwei, Wu, Harris
Format: Article
Language:English
Subjects:
Accounting
Business
Extensible Business Reporting Language
Financial statements
International finance
Interoperability
Pressing
Public companies
Publicly held corporations
Schedules
Security
Taxonomy
Technology application
Wakes
XBRL (Document markup language)
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Summary:In the wake of the global financial crisis, a pressing need exists for improving investor friendliness, especially the transparency and interoperability of the financial statements of public companies. eXtensible Business Reporting Language (XBRL) and XBRL taxonomies can accomplish this objective. In the U.S., the Securities and Exchange Commission (SEC) has mandated that all public companies must file their financial statements using XBRL and the U.S. Generally Accepted Accounting Principles (GAAP) taxonomy according to a phased-in schedule. Are the XBRL-based financial statements interoperable? This question is addressed by analyzing all of the annual XBRL financial statements filed to the SEC as of February 26, 2010. On average, 63% of data elements are not comparable between a pair of statements. The incomparability is partly caused by issues related to the GAAP taxonomy and misuse of the taxonomy by companies. The results have practical implications that will help improve the quality of financial data.
ISSN:1548-1131
1548-114X
DOI:10.4018/jebr.2011040103