The stereotype of the timid acuntant was established long before Hollywood started taking its shots. Leo Tolstoy captured this apparently timeless stereotype exquily in his epic War and Peace. As Napoleon’s soldiers battle with Russian forces, the acuntant provides the mic relief: 

Behind Prince Bagration rode an officer of the suite, the prince’s personal adjutant, and…an acuntant who had asked permission to be present at the battle out of curiosity. The acuntant, a stout, full-faced man, looked around him with a naive smile of satisfaction and presented a strange appearance among the hussars, ssacks, and adjutants, in his camlet at, as he jolted on his horse with a nvoy officer’s saddle.

"He wants to see a battle," said Zherkov to Bolkonski, pointing to the acuntant, "but he feels a pain in the pit of his stomach already."

His reputation for timidity notwithstanding, today’s acuntant may well be fiven for feeling a pang of torment when he first enunters XBRL. Taking a look at the XBRL section of the EDGAR Filer Manual, he finds most of it sounds like this:

The URI ntent of the xlink:href attribute, the xsi:schemaLocation attribute and the schemaLocation attribute, after XML Base resolution, must be relative and ntain no forward slashes…

Told to get a feel of what an instance document looks like, he likely finds even the simplest of examples forbidding:

OK, the acuntant rationalizes, XBRL is a markup language, so of urse it’s going to have many more <’s and >’s than dr’s and cr’s.  As he navigates the new financial reporting superhighway, the acuntant mforts himself that he can remain in the financial reporting driver’s seat, while the XBRL technician slaves under the hood.

At least that has been the assumption. As John Turner recently said in an interview with this blog: 

Since the early days of XBRL, there has been a mantra within the nsortium that XBRL models existing reporting processes, it doesn’t change them. XBRL doesn’t alter GAAP, or impose a standard chart of acunts on mpanies.

But despite the best efforts and intentions of XBRL’s leaders, I wonder if this powerful technology, like so many others, changes the game simply by being there.

When acuntants first learned about XBRL several years ago, they were indeed ncerned that it would entail a standard chart of acunts. They were reassured that it did not. Extensiblity is part and parcel of XBRL – it’s even part of the name itself.

But isn’t something like a standard chart of acunts where we’re headed? At the July 2009 XBRL Technology Workshop, Campbell Pryde of XBRL US said that extensions that appear often in instances will be added to the US-GAAP taxonomy – which, if I heard rrectly, was reiterated by SEC staff at the SEC’s March 23 XBRL Public cation Seminar.

Fast forward five or eight years. At that point, won’t any extension be viewed with a whiff of suspicion by analysts and investors?  A mpany must be doing something unusual if the line item it needs to describe has not yet been inrporated in the US GAAP chart of…er, taxonomy. 

Financial analysts are already circumspect about extensions (see page 9 of the most recent CFAI XBRL survey). Perhaps they’ll beme less so, but it seems more likely that, as taxonomies are refined, they’ll beme more wary. When nsidering a new item for financial statements, won’t acuntants look first to taxonomies for an existing element and try hard – very hard — to find one?

What about XBRL’s impact on acunting processes? In the recent SEC XBRL Seminar, Tony Mealey, Senior Acuntant at the Office of Interactive Data, said (beginning at 54:12):

“The third rule, to use the standard element with the narrowest definition, can be illustrated by the following example.

“In the statement of cash flows, the filer reports the payment for mmon stock repurchases. Instead of selecting the standard element “payment for the repurchase of equity,” the filer should select the element “payment for repurchase of mmon stock,” because it has a narrower definition.

 “I might also point out that, even if the line item label in the traditional format financial statements reads  “payment for the repurchase of equity,” if the transaction represents only the payment for repurchasing mmon stock, that is the ncept that needs to match the element selected.”

This surprised me. I would have thought the SEC’s instruction here would be “pick the element that most closely matches the line item on the traditional format financial statements.” The financial statements are the product of the hard work, debate, and mpromise among management, mpany acuntants, and the auditors. In this case, that process yielded “equity,” not “mmon stock.”

Well, six of one, half-dozen of the other, right?  But the impact may be more significant. In her post on this blog last November, Chie Mitsui said:

When selecting sales from Japanese financial statements, users just choose the element “Sales” from the “InmeStatement”  and the “Current year” period ntext. All Japanese mpanies’ taxonomies have the same name for this element, hence users can easily select it.…[But] naming for US XBRL financial statements varies. Each mpany decides its own names for elements, presentation links, and ntexts. For users unfamiliar with US mpany financials, such innsistent naming causes nfusion during the selection of elements for mparison.

This too surprised me. The item to be mapped and tagged is the -line, i.e., sales or total revenue. On traditional financials, the terminology chosen by mpanies varies little. How many different elements uld there be for the line?

The 3Q 2009 report of Progress Energy, a utility holding mpany, provides an example of what Chie was talking about. In the instance, the element selected for the line was UtilityRevenue. The standard label for UtilityRevenue is “Electric and Gas Revenue.” The mpany extended the taxonomy to overwrite the label with “Operating Revenues,” which matches the line in the traditional inme statement.

I don’t know if UtilityRevenue was chosen because it was the narrowest definition. I don’t know whether — given the many objectives that financial reporting might have, from international mparability of financial statements to improved mpany analysis by SEC staff — UtilityRevenue is the best choice or not.

What I do know is that “utility revenue” does not appear anywhere in the mpany’s  3Q financials (which were reviewed by the mpany’s auditors). Like “equity” versus “mmon stock,” perhaps the choice of UtilityRevenue for the line of a utility mpany seems like a quibble – in fact, most definitely an improvement.

But suppose it was a forest products mpany whose business is 92% wood and 8% paper. The traditional P&L has “ Sales”; the US-GAAP taxonomy offers both TimberRevenue and SalesRevenue elements. Which is better? At the least, such choices and the decision-making it requires seem like a non-trivial change in traditional acunting processes (not to mention what additional auditing procres it may entail).

Perhaps that’s inevitable; perhaps that’s all to the good. But like so many other industries where new technology is introduced, it is reasonable to ask what the impact on acunting will be, and whether XBRL will merely express acunting output, or change it in important ways.