XBRL Format Research Articles

Jim’s Sporting Goods: The Move to XBRL Reporting

ABSTRACT: This case introduces the alternatives that companies must consider when deciding how to comply with the SEC’s (U.S. Security and Exchange Commission) 2009 mandate to include financial statements in XBRL format when submitting quarterly and annual reports. Jim’s Sporting Goods, an SEC-accelerated filer, is facing compliance with this mandate in about a year and they are investigating their alternatives. Working with Jim’s Sporting Goods’ income statement for 2010, students become actively engaged in each of three alternatives. Students first take on the role of an external tagging agent who must map Jim’s Sporting Goods’ income statement line items to elements in the U.S. GAAP XBRL taxonomy. Students make decisions between competing potential XBRL elements, document their decisions in a spreadsheet, and identify issues to be resolved by Jim’s Sporting Goods’ CFO. Second, students take on the role of an internal accountant who must learn to use an Excel-based software package, Rivet Dragon Tag, to tag Jim’s Sporting Goods’ income statement line items. Third, students register with and become familiar with an online tagging service to tag Jim’s Sporting Goods’ income statement line items. Finally, students evaluate the three alternatives, discuss the advantages and disadvantages of each, and make a recommendation for how to proceed. The case is based on an actual publicly traded company facing the compliance issues presented.

Does it add up? Early evidence on the data quality of XBRL filings to the SEC

In 2009, the Securities and Exchange Commission rolled out the first stage of a multi-year program to transition its EDGAR disclosure repository to the XBRL format. The quality of the XBRL data in the repository is vital for the success of the Commission’s interactive data program. A key aspect of the data quality of these filings is the correctness of the mathematical relationships implied by the taxonomy and implemented in the instance document. One quarter of the filings by the initial 400 large corporations in the first round of submissions had errors, with differences reported monetary facts and the sum of other monetary facts that were bound together in a computation relationship. The primary cause of these errors was inappropriate treatment in the instance documents of underlying debit/credit assumptions in the taxonomy. The results of the research have a number of implications for filers, the SEC, XBRL US, software vendors and the global XBRL community.

The Process Of Creating XBRL Instance Documents: A Research Framework

The past decade has witnessed a technological revolution fueled by the widespread use of the Internet, web technologies, and their applications. Within financial reporting, proponents of extensible Business Reporting Language (XBRL) argue that XBRL will revolutionize financial reporting since it allows corporate financial information to be aggregated, transmitted, and analyzed quicker and more accurately (Hoffman and Strand 2001; Hannon 2002; Bovee et al. 2005; Willis 2005; Cox 2006). The SEC recently mandated that publicly traded companies furnish financial information in XBRL format (Rummel 2008; SEC 2009a). Thus, the purpose of this project is to provide researchers with a framework for examining the process financial statement preparers use to create XBRL instance documents. Further, the paper (1) demonstrates how the framework may be used, (2) raises unanswered questions, and (3) suggests avenues for future research.

Longitudinal Analysis of Voluntary Adoption of XBRL on Financial Reporting

In December 2008, the SEC approved final rules which require companies to submit financial statements in XBRL format with their SEC filings, beginning with quarterly June 2009 filings for the largest companies and within three years for all public companies. Previously, the SEC established a voluntary filing program for XBRL reporting in March 2005. Accordingly, the objectives of our study are: (1) to provide an overview of the benefits and global development of XBRL and (2) to evaluate the extent of XBRL adoption following the implementation of the voluntary filing program. We find the quantity of voluntary reporting to be relatively low, but reporting significantly increased over time. Voluntary adopters are larger and more innovative firms in their industries. We find evidence suggesting increasing efficiency in XBRL reporting, as reporting lags have significantly decreased over time. This efficiency improvement is positive news and may accrue to other companies after they are required to use XBRL reporting. XBRL is expected to have a positive effect on accounting and financial reporting worldwide, particularly used in conjunction with International Financial Reporting Standards (IFRS).

SEC proposes mandatory use of XBRL tagging of financial statements

PurposeThe purpose of this paper is to explain the SEC's proposal to require domestic and foreign public companies that prepare their financial statements in accordance with US GAAP to file financial statements contained in registration statements and periodic reports in an interactive data format using XBRL, or “eXtensible Business Reporting Language”.Design/methodology/approachThe paper explains the purpose of XBRL, provides an overview of the SEC's proposal, discusses the consequences of noncompliance, and explains the SEC's “bifurcated” approach to filers' liability for the interactive data they are required to provide.FindingsXBRL, like the other electronic formats currently used by registrants in their SEC filings, defines or “tags” data using standard definitions. The SEC believes that financial reporting based on the XBRL format would create new ways for investors, analysts, and others to retrieve and use financial information in documents filed with the SEC. XBRL tagging of financial statements most likely represents only the SEC's first step in moving toward more widespread adoption of XBRL reporting.Originality/valueThe paper contains practical guidance by experienced securities lawyers.

Do early and voluntary filers of financial information in XBRL format signal superior corporate governance and operating performance?

On March 16, 2005, the SEC issued Final Rule 33-8529 encouraging registrants to voluntarily file tagged financial statement information on the EDGAR reporting System using XBRL format. In this paper, we examine whether early and voluntary filers of financial information in XBRL format demonstrate superior corporate governance and operating performance relative to their non-adopting peers. We investigate performance, market, and structure-related firm variables. Our results suggest that corporate governance is significantly and positively associated with a firm's decision to be an early and voluntary filer of financial information in XBRL format. At the same time, firm performance factors including liquidity and firm size are also associated with the early and voluntary XBRL filing decision. Our findings should be particularly interesting for the SEC, as it considers the corporate governance and firm-performance related associations between certain registrants' early and voluntary response and its call for XBRL-based filings.

INFORMATION TECHNOLOGY ADDRESSES TRANSPARENCY: THE POTENTIAL EFFECTS OF XBRL ON FINANCIAL DISCLOSURE

eXtensible Business Reporting Language (XBRL) may vastly improve the transparency of firms’ financial information. Financial statements in XBRL format allow financial report users to directly search for relevant information regardless of the location of the information and to easily compare related information between different companies. As a consequence, management’s financial reporting choices and financial disclosure management practices are more explicitly presented to users.