Is there a Conflict between Principles-based Standard Setting and Structured Electronic Reporting with XBRL?

20 Pages Posted: 5 May 2021

See all articles by Dirk Beerbaum

Dirk Beerbaum

Aalto University - Department of Accounting and Finance; Aalto University - School of Business

Maciej Piechocki

affiliation not provided to SSRN

Christoph Weber

Johan Wolfgang Goethe University

Date Written: April 30, 2021

Abstract

National standardsetters and other observers continue to express concerns over a principles-based developed IFRS taxonomy. Based on the comments as part of the consultation phase on the taxonomy due process worries exist that to combine the taxonomy due process with the standard due process might negatively impact the principles-based nature of the IFRS standards. Recent comments to the IASB consultation on the “IFRS Taxonomy Due Process” contain more arguments why principles-based accounting and the IFRS taxonomy are perceived as a conceptual conflict. Although there is conceptual conflict between a principles-based accounting standard and the development of a taxonomy compared to a template based rule-based accounting framework, this appears in the case of the IFRS taxonomy as only a minor one. IFRS Taxonomy development faced this conflict for many years and is well aware of that. A common practice approach was applied, which also intended to overcome this conflict. XBRL has further attempted to bridge this conflict by offering multidimensional modeling of ac-counting standards and multi-extensible elements. This enables also more elements and more flexibility, which particularly a principles-based taxonomy requires.

Suggested Citation

Beerbaum Dr., Dirk and Piechocki, Maciej and Weber, Christoph, Is there a Conflict between Principles-based Standard Setting and Structured Electronic Reporting with XBRL? (April 30, 2021). Available at SSRN: https://ssrn.com/abstract=3837235 or http://dx.doi.org/10.2139/ssrn.3837235

Dirk Beerbaum Dr. (Contact Author)

Aalto University - Department of Accounting and Finance ( email )

P.O. Box 1210
Helsinki, 00100
Finland

Aalto University - School of Business ( email )

Finland

Maciej Piechocki

affiliation not provided to SSRN

Christoph Weber

Johan Wolfgang Goethe University ( email )

Mertonstrasse 17-25
Frankfurt am Main, D-60325
Germany
+49 69-7982-2380 (Phone)
+49 69-7982-3457 (Fax)

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