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XBRL for Financial Reporting: Evidence on Italian GAAP versus IFRS

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  • Diego Valentinetti
  • Michele A. Rea

Abstract

The systematic adoption of the eXtensible Business Reporting Language (XBRL) for financial reporting represents a great challenge. Worldwide, a large number of regulators are making an effort to promote the adoption of this standard to simplify and enhance the communication of financial information. This requires the definition of well‐structured taxonomies that can standardize and accommodate the content of financial reports prepared by firms. This study aims to analyze the regulator‐led adoption of XBRL for financial reporting. It examines the XBRL taxonomies used by Italian firms to reflect their financial reporting under rule‐based Italian GAAP and principles‐based International Financial Reporting Standards (IFRS). We compare the alignment of the Italian GAAP taxonomy and the IFRS taxonomy with Italian companies' financial statements and find two different levels of fit. The results offer useful insights for regulators and policy makers in prescribing or establishing appropriate taxonomies. We illustrate the potential impacts of the different taxonomies on the quality of financial reporting in terms of comparability and potential loss of information. Résumé L'adoption systématique de l'eXtensible Business Reporting Language (XBRL) dans la communication de l'information financière est un enjeu de taille. Partout dans le monde, de nombreuses autorités de réglementation s'efforcent de promouvoir l'adoption de cette norme pour simplifier et favoriser la communication d'information financière. Cette conversion exige la définition de taxonomies bien structurées, aptes à normaliser et à traiter le contenu des rapports financiers préparés par les sociétés. Les auteurs ont pour but d'analyser l'adoption du XBRL dans la communication de l'information financière, à l'initiative des autorités de réglementation. Ils étudient les taxonomies XBRL utilisées par les sociétés italiennes pour convertir leur information financière établie conformément aux PCGR italiens, fondés sur les règles, et aux normes internationales d'information financière (IFRS), fondées sur les principes. Les auteurs comparent l'alignement de la taxonomie des PCGR italiens et de celle des IFRS dans les états financiers des sociétés italiennes et observent deux niveaux d'adéquation différents. Les résultats fournissent aux autorités de réglementation et aux responsables de l'élaboration des politiques des renseignements utiles en ce qui a trait à la prescription ou à l'établissement de taxonomies appropriées. Les auteurs illustrent les conséquences potentielles des différentes taxonomies sur la qualité de l'information financière au chapitre de la comparabilité et de la perte potentielle d'information.

Suggested Citation

  • Diego Valentinetti & Michele A. Rea, 2013. "XBRL for Financial Reporting: Evidence on Italian GAAP versus IFRS," Accounting Perspectives, John Wiley & Sons, vol. 12(3), pages 237-259, September.
    • Handle: RePEc:wly:accper:v:12:y:2013:i:3:p:237-259
    DOI: 10.1111/1911-3838.12008
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    1. Dirk Beerbaum & Maciej Piechocki & Christoph Weber, 2017. "Is there a Conflict between Principles-based Standard Setting and Structured Electronic Reporting with XBRL?," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(3), pages 33-52.
    2. Valentinetti, Diego & Flores Muñoz, Francisco, 2021. "Internet of things: Emerging impacts on digital reporting," Journal of Business Research, Elsevier, vol. 131(C), pages 549-562.
    3. Tiberius, Victor & Hirth, Stefanie, 2019. "Impacts of digitization on auditing: A Delphi study for Germany," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 37(C).
    4. Ariel Markelevich & Lewis Shaw & Hagit Weihs, 2015. "The Israeli XBRL Adoption Experience," Accounting Perspectives, John Wiley & Sons, vol. 14(2), pages 117-133, June.

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