An Empirical Investigation into Interactive Use of XBRL-Tagged Financial Statement Data

Abstract:     
A key promise for eXtensible Business Reporting Language (XBRL) is that it allows software to extract precisely the financial information required from companies’ Securities and Exchange Commission (SEC) filings. This study examines XBRL’s ability to achieve that benefit. Ratio analysis, a common investment task, was chosen to test XBRL’s ability to provide access to financial data quickly, efficiently, and interactively. The results show that XBRL financial statement data is not adequately tagged to allow most users to perform ratio analysis faster or more efficiently than prior approaches. According to the XBRL US GAAP Taxonomy Preparers Guide, this lack of tagging is required of the instance document preparers. Although our findings indicate that instance documents are much less useful than they could be, requiring filers to manually tag all XBRL data elements (currently about 17,000 tags) is impractical. This study also presents three alternatives that would help investors use XBRL data as originally envisioned.

Keywords: XBRL, taxonomy, users, financial ratios, statement analysis

working papers series