Companies - 02/27/2019

XBRL Structured Data and its impact on businesses

As it is well known, and you can recall the subject in this article, one of XBRL’s key intentions is to allow computers to compare a company’s structured quarterly and/or annual data in different periods with its market peers or with any other company. Allowing a computer to perform such task would give us results in a faster, more reliable, and less tiring way.

Since 2009, the SEC has been facing problems related to structured data as companies are not significantly adhering to the proposed taxonomy due to their own valuation and accounting frameworks. The problem for FPIs is even greater as they are part of more than just one stock exchange.

Thus, companies with difficulties in adhering to the taxonomy are suggested to create extensions as a proposed solution. This option allows companies to ensure that their unique structured data will be available with the duly required trustworthiness. However, although this resource is powerful, it limits comparability between different structured data.

We are creating a structured data scenario that will not be very useful in the future since the increased number of extensions and lack of standardized company reports will make it difficult for softwares to compare XBRLs in a way that is practical for users. Thus, instead of promoting advanced automated and dynamic readers in a single compact file, we are stuck with static document readers.

Written by Fernando Fernandes