The XBRL Project
The project, entitled “Development of new XBRL taxonomies for the communication of financial data between companies and the Italian banking system and between companies and the Italian revenue”, was developed from a careful analysis of XBRL language use in three leader countries in the exploitation of this technology: the United Kingdom, the Netherlands and the United States.
XBRL (acronym of eXtensible Business Reporting Language) is a language based on XML, and it is mainly employed for the communication and the electronic exchange of financial information. XBRL was conceived with the purpose of improving financial communication. In order to classify balance sheet items in a coherent way and have a software process them, the creators of XBRL defined a series of specific tags for each concept appearing in the statements. Afterwards, they organized these tags in taxonomies – data dictionaries that define the several concepts in the balance sheet items of various companies-.
Every taxonomy includes tags, definitions and references so that data are marked with a specific meaning.
In the UK, XBRL is employed for the compulsory filing of fiscal information at the HMRC and for the voluntary filing of annual reports at the Companies House. These two programs are responsible for the creation of more than 2 million XBRL documents every year. They are the biggest XBRL filing programs in the world and they are known for their effective integration with a large scale adoption by software sellers in the market. It is worth mentioning, in the context of the UK, the creation and development of Inline XBRL.
The Netherlands are part of the SBR program (Standard Business Reporting), an assemblage of international programs led by government agencies with the aim of regulating financial processes. The Taxonomy Project or NTP was born in 2004 to facilitate administrative processes.
The NTP created an XBRL taxonomy that allows businesses to produce financial information for governments directly from their databases and to use that information in a safe and efficient way. Other procedures envisaging the adoption of the XBRL language have been introduced also in the domain of communication between companies and banks. The latter grant several tax incentives to those companies that decide to register the XBRL instance. In addition to this, there is the simplification of the interface for statistical data storage.
The United States have always encouraged the adoption of the XBRL language, and they now record extremely high numbers of instances that have been registered according to this standard. In the United States, the filing of financial statements in XBRL format is required for companies listed on the stock exchange. The created taxonomies share the possibility to be extended in relation to what was decided by central authorities.
The subject of our experimental project is the evaluation of the extension of XBRL technology, in relation to the current Italian standard and to the comparative analysis with the aforementioned countries.
In Italy, since the annual report of 2014, it is mandatory to register statements in XBRL format not just in the case of preliminary statements (mandatory since 2009) but including integrative notes as well.
Specifically, we focused on the fiscal domain. Starting from IRAP and IRES 2014 forms and from the filing procedure established by the Italian income revenue authority, we have analyzed the tracciato record employed for the importation of statements in the software and consequently created a taxonomy, inclusive of the fiscal forms and other elements from the IT-GAAP taxonomy.
Furthermore, we have added specific elements from the fields already present in the statements. Then, we have created several examples of annual reports, in InLine XBRL format, in relation to fiscal statements.
The project proved a useful occasion to envision a possible widening of the XBRL technology applications, and gave us the possibility to verify that such technology actually bears all the potentialities that are already exploited in the strongest countries of the international market.