Implications of XBRL - financial reporting research opportunities

XBRL is a computer language add-on that facilitates the rendering of financial information. Its development has been accompanied by claims that XBRL will, among other things, lead to continuous reporting and eliminate financial reporting differences including differences between jurisdictional GAAP. These discussions have largely ignored the literature on voluntary disclosures and earnings management. Once this literature is considered the predicted implications of XBRL appear exaggerated. XBRL does not solve financial reporting judgment issues or lead to continuous reporting. The reduced transaction costs and improved efficiency in rendering the information are, however, powerful and far-reaching consequences of the language. XBRL also has implications for financial system design, auditing and market efficiency and it has the potential to enrich the data available to analysts and researchers. I identify and discuss some of the implications of XBRL for businesses and, in doing so, identify research opportunities.