Question

1.What are some of the common problems users encounter when trying to compare financial statements of companies (even when they are in the same industry)? Describe how using XBRL could help alleviate these problems.

2. What are the current XBRL filing requirements for publicly-listed firms in the US?

3. Why should a business create XBRL-enabled financial reports?

4. Does the FDIC require banks to file any report(s) using XBRL? If so, which reports?

Answer 1

Answer:

1. What are some of the common problems users encounter when trying to compare financial statements of companies (even when they are in the same industry)? Describe how using XBRL could help alleviate these problems.

Ans: The companies have different reporting structures and accountant labels.

• For example, two different even though they are in the same industry might record the same expense under different heads based on the nature of the expenses they occurred and the reason they occurred the same for.
• Also, there might be some cases where companies even though they are working in the same industry have different revenue and cost operations.
• XBRL helps in the standardization of the financial reports prepared by a business organization so that the investors and stakeholders can make ready comparisons between the companies.
• It provides a set structure to compare different companies in the same industry and companies among different industries.

2. What are the current XBRL filing requirements for publicly-listed firms in the US?

    Ans: XBRL filing requirements for publicly-listed firms in the US are as follows:

• The SEC requires the filing of the operating company financial statement information and fund risk/ return summary information in the XBRL format.
• The SEC has given a 3-phase compliance for companies following US GAAP starting from june15, 2019, ending in 2021 and for IFRS it will be 2021 only for the line XBRL.

3. Why should a business create XBRL-enabled financial reports?

     Ans: as described above, the XBRL help companies to standardize their financial reporting structure.

• Also increasing statutory requirement has also laid importance on the XBRL compliances as major reports are needed to be filled in the XBRL format. Therefore, the business should create an XBRL enable financial report.

4. Does the FDIC require banks to file any report(s) using XBRL? If so, which reports?

Ans: Yes, the FDIC requires all the banks under its jurisdiction to file their quarterly reports of condition and income in the XBRL format.