Table of Contents

1 Introduction

In an XBRL implementation, the taxonomy lays the foundation for data collection. The taxonomy is typically reviewed by stakeholders, including preparers, software vendors and data users, as well as the taxonomy team before it is deployed in a filing system. This guidance document discusses taxonomy review planning and the aspects of a taxonomy that need to be reviewed by different stakeholders.

This guide is primarily intended for regulators that publish XBRL taxonomies and stakeholders interested in taxonomy review, such as preparers, regulators, collecting entities, data architects, software vendors and data consumers.

2 Why external taxonomy review is needed

Filing XBRL reports with regulators is typically done to comply with reporting requirements. It is essential to ensure that the regulations and accounting standards are accurately represented in the taxonomy. A taxonomy review helps identify gaps, such as incorrect or missing reporting requirements, as well as technical issues that would prevent preparers from creating a valid XBRL report.

Implementing fixes after the taxonomy is put to use is challenging, as the new version must be integrated into software products and preparers may need to revisit their filings. The taxonomy review process helps to reduce this risk as issues are identified and fixed before the taxonomy is put into production in the filing process.

The taxonomy review feedback from all stakeholder groups ensures that different perspectives are captured. For example, a software vendor may expect the taxonomy to be published as a 'Taxonomy Package', and a preparer may want to check the validation rules in the taxonomy. A taxonomy available for review also helps stakeholders prepare for future reporting requirements. For example, in a new reporting programme, a preparer can get familiar with XBRL report preparation, and a software vendor or service provider can fine-tune their offerings.

Read this separate piece of guidance on taxonomy publishing for more details on best practices for publishing XBRL taxonomies and information that should be provided as part of an XBRL Taxonomy Package.

3 When to publish a taxonomy for review

The length of a taxonomy review and the time needed to address the feedback are crucial components of the overall project timeline. The finalised taxonomy should be published well before its application in the live filing process. Therefore, careful planning of the taxonomy review process is vital.

The necessary taxonomy review period varies with the complexity of the taxonomy. A prudent estimate is a 4–6-week review period. The final taxonomy should be published at least three months before its use in the live filing process. These timeframes may extend, particularly for the initial taxonomy deployment or for more complex taxonomies. These estimates should serve as a general guideline. Regulators should assess their programme needs and extend the taxonomy review period if required.

4 Collecting taxonomy review feedback

Regulators should establish an outreach plan and select communication channels to update stakeholders about taxonomy releases, ensuring that updates reach the intended audience. One effective method is creating a mailing list for taxonomy updates to which interested parties can subscribe.

Regulators can request open-ended feedback or seek input on specific taxonomy aspects. By defining the areas for review, regulators strategically focus stakeholders' attention on specific aspects of the taxonomy.

Regulators may choose to share the taxonomy comments they have received and the actions they have taken to address them, but this will typically be determined by their public consultation policy.

5 Stakeholder Review Aspect

A taxonomy review engages various stakeholder groups. This section explains how different groups should review the taxonomy to ensure that the taxonomy is evaluated from all important viewpoints.

5.1 Preparers

are vital to the taxonomy review process as they use it to create reports regulators. Preparers include the entity submitting the report and those helping the entity with report creation, such as service providers. Here are the important aspects for preparers to focus on during the review:

• Ensure that the reporting requirements of the underlying regulatory, legislative or accounting standard are reflected correctly in the taxonomy.
• Ensure that any business rules incorporated work correctly and can be complied with.
• Identify gaps in the taxonomy by creating a sample XBRL report based on the preparer's real data. Preparing a sample XBRL report will also help identify any practical difficulty in tagging, such as ambiguous concept labels.

5.2 XBRL Taxonomy Experts

XBRL Taxonomy Experts understand the technical construction of a taxonomy. These stakeholders may not directly relate to the filing programme, but they may provide valuable input on taxonomy architecture and its construction. The following are review aspects from a data or taxonomy architect's perspective:

• The data modelling approaches applied are reasonable for the taxonomy use case.
• The versioning mechanism implemented suits the nature of a taxonomy and the frequency of expected changes. Refer to this guidance on taxonomy version management for more information.
• Custom components are not introduced where standard mechanisms are available.
• The taxonomy follows the best practice guidance on taxonomy architecture.
• The taxonomy follows the principles outlined in its architecture guide.
• For a taxonomy that imports components from an existing taxonomy, XBRL taxonomy experts should check that the taxonomy adheres to any instructions for extending the imported taxonomy.
• The taxonomy is fully compliant with the XBRL technical specifications.

5.3 Regulator or collecting entity

Here are the considerations for taxonomy review by stakeholders within the regulatory and collecting entities who were not involved in its development:

• All information required for regulatory or supervision purposes is captured in the taxonomy.
• Data modelling is sufficiently granular to meet reporting requirements and expected analysis.
• The technical construction of a taxonomy does not require preparers to report additional information that is not mandated by the reporting requirements.
• The validations incorporated in the taxonomy will ensure clean, quality data.
• Whether additional checks are required outside of the taxonomy to ensure data quality.
• The user-friendliness of the taxonomy and the accompanying guides.

5.4 Software vendors

Software applications are essential for filing programmes and timely submission of XBRL reports. Here are a few key taxonomy review aspects from a software vendor's perspective:

• The taxonomy is compliant with XBRL specifications.
• Custom components and relationships (if any) that might need specific software software support.
• The taxonomy is consistent with the implementation or software development guide.

5.5 Data consumers

Data consumers are the users of the XBRL reports received by collectors, and can include data aggregators and investors. Their perspective adds value to the taxonomy. Here are some key points for taxonomy review from the perspective of data consumers:

• The taxonomy includes the content required for analysis.
• How Entity Specific Disclosures will be reported.
• Mapping of taxonomy models to analysis models.

6 Taxonomy maintenance review

Taxonomies are released during regular maintenance cycles or on an ad-hoc basis to address new business requirements, technical updates, or incorporate fixes, and these updates will also require reviewm by stakeholders.

The review considerations for a taxonomy released as a part of a maintenance cycle remain as discussed above. Taxonomy updates are assumed to carry forward the same architecture principles; hence, the turnaround time for such a review process is quicker unless it has undergone significant changes.

When a structural taxonomy change is necessary, adequate stakeholder outreach ensures all interested parties understand the impact and have provided input. Change logs published as versioning reports or human-readable descriptions help review taxonomy updates. Read how to communicate the changes between taxonomy versions in separate guidance. The following are additional aspects to be taken into consideration while reviewing a taxonomy released as a part of the maintenance update:

• The structure of the taxonomy remains consistent unless otherwise stated.
• The intended changes, such business requirement changes or bug fixes, are correctly into the taxonomy.
• Comparability of XBRL reports prepared using different taxonomy versions.