American Accounting Association

AUGUST 6-10, 2011  •  DENVER, COLORADO

Session Title: XBRL and the Information Value Chain
Presentation Date: Tuesday August 9, 2011
Presentation Time: 10:15 am-11:45 am

Feeding the Information Value Chain: Deriving Analytical Ratios from XBRL filings to the SEC

Roger Debreceny, University of Hawai‘i at Manoa
Alessandro d'Eri , International Accounting Standards Board
Carsten Felden, Technische Universität Bergakademie, Freiberg
Stephanie Farewell, University of Arkansas at Little Rock
Maciej Piechocki, IFRS Foundation

ABSTRACT: A key public policy driver of XBRL adoption in the USA and elsewhere has been to make information on corporate performance and risks readily available to information consumers. The financial statement data filed with a number of regulators and stock exchanges provide the raw material for one of the most important aspects of peer group analysis, which is the derivation of financial statement ratios. This paper investigates the ability of information consumers to derive ratios from filings in XBRL made to the SEC. In the absence of a financial statement ratios canon, we identify more than 63 ratios drawn from the financial statement analysis professional literature. The accounting concepts embedded in these ratios are matched with the US GAAP taxonomy to identify an element that is best semantic equivalent. We develop and test a methodology to identify elements that can be semantic alternatives to the best choice. We then assess the existence of these elements in filings made by the 1,205 commercial and industrial corporations that filed with the SEC by September 2010. We assess the ability of information consumers to calculate 65 key financial statement ratios. For some of these ratios, the availability of these ratios comes at the cost of potential loss of information quality.

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