Does the XBRL Reporting Format Provide Incremental Information Value? A Study Using XBRL Disclosures During the Voluntary Filing Program

Abstract

This study investigates whether the eXtensible Business Reporting Language (XBRL) reporting format provides incremental information value beyond the same 10K/10Q filings previously provided in HTML format. Using a sample from the XBRL Voluntary Filing Program, we document a significant increase in stock price variance on the day when voluntary XBRL reports are filed. We find market response is stronger when more content is filed on the same day. To evaluate relative information value, we decompose the quarterly return variance for three primary news announcements related to earnings including earnings announcement, HTML filing, and XBRL filing. We find XBRL filings have larger relative information value than HTML filings. Our results indicate that the XBRL reporting format provides incremental information content.What we need is something that will give individuals faster access to better information that they can easily use and understand. We need to make searches for information easier. It should be easy to call up information about any company you choose. You should be able to download it and use it in the personal software of your choice. And you then should be able to easily analyze and compare the data with the same information from other companies. We want to make the numbers derived from financial statements vastly more accurate. And we want to allow companies to communicate with investors on a constant basis.

Initial Effects of Mandatory XBRL Adoption across the Indonesia Stock Exchange`s Financial Information Environment

“…XBRL characterized as a universal data platform. Using XBRL, data uniformity can be achieved with the minimal efforts (Kim, Lim, & No, 2012), reducing the manual process so the users just focus on the analysis tasks (Apostolou & Nanopoulos, 2009), and enhancing the disclosures quality that impact to the decision accuracy (Chowdhuri et al, 2014;Efendi, Park, & Subramaniam, 2016). The presence of XBRL gives positive expectations on improving the financial information quality.…”

xamining XBRL Early Adopters: A Study of Determinants and Value Relevance

“…The benefits of XBRL are still debatable and questionable: Will XBRL have a significant impact on financial statements users. Janvrin [6] and Efendi, Park, & Subramaniam [7] suggest that the implementation of XBRL disclosure provides benefits to users of financial statements, particularly for investors, because XBRL reports more incremental information than traditional HTML formats. This fact indicates that XBRL can improve the relevance of accounting information.…”

Information‐Processing Costs and Breadth of Ownership

“…Blankespoor (2014) finds that the XBRL mandate prompts firms to increase their footnote disclosures. As well, studies suggest that XBRL adoption reduces information asymmetry (Yoon et al 2011;Li et al 2013), provides incremental information content (Efendi et al 2016), increases information efficiency (Kim et al 2012), increases small institutions' responsiveness to 10-K information (Bhattacharya et al 2018), and constrains opportunistic earnings management (Kim et al 2013). One related study is that of Blankespoor, B.P.…”

“…Several XBRL studies focus on the equity market consequences of XBRL-induced changes in the information environment (e.g., Yoon et al 2011;Kim et al 2012;Li et al 2013;Blankespoor 2014;Liu et al 2014;Dong et al 2016;Efendi et al 2016). Fewer studies, however, consider whether reduced information-processing costs induced by XBRL affect a firm's ownership structure.…”