Design and standardisation of XBRL solutions for governance and transparency

The eXtensible Business Reporting Language (XBRL) is an XML-based, de facto standard for the dissemination of metadata associated with business reporting information. The standard allows parties to build reporting solutions within a wide variety of information value chains. The standard provides considerable flexibility in the way those parties construct those services. The XBRL specification provides a framework upon which those that wish to develop an XBRL-based reporting environment then build. XBRL taxonomies provide metadata about reporting concepts. Instance documents, aligned with those taxonomies, report facts and provide entity-specific metadata. The XBRL specification constrains taxonomy design but within these constraints, developers have very wide discretion. This inherent flexibility creates challenges to information providers, intermediaries and consumers. Designers must balance flexibility, transparency, reliability and cost. We provide four XBRL use cases to illustrate these challenges. We further analyse these issues in a case study of the prudential supervision of financial institutions in Europe with the COREP framework. The COREP taxonomy was the first to employ the dimensional XBRL specification. The dimensional specification allows for the reporting of data in a hypercube modelled in a taxonomy. The hypercubes in the COREP taxonomy allow for breakdowns of solvency reporting into their constituent structures. The COREP hypercube structures are highly complex. Meeting objectives for flexibility, national prudential regulators are able to make national extensions to the foundational COREP taxonomy. As a result, we observe considerable national variation in calculation relationships and in dimensional structures. Radically different data models contribute to the inconsistencies among the various national taxonomies within the overall COREP framework. We show how this flexibility in multiple taxonomy design across different European countries has created challenges for information providers and difficulties for information consumers seeking to assess institutions across national borders. We make recommendations on the balancing of needs for flexibility and data compatibility within taxonomy design.