Taxonomies

What is an XBRL taxonomy?

XBRL taxonomies are dictionaries for reporting. They provide digital definitions for business concepts and make digital reporting possible.

Digital reports work by ‘tagging’ each reported fact so that it can be identified by computer software. For example, the tag “ProfitLoss” might be used for net earnings, and “EnergyConsumed” could indicate energy consumption. Taxonomies define the tags to be used for each concept to be reported, giving the data a digital meaning.

Taxonomies are usually specific to particular areas of reporting. They are a way to capture a set of reporting rules in digital form, ensuring that all reports are consistent, comparable and computer-readable.

If the XBRL standard provides the fundamental alphabet and grammar for digital reporting, XBRL taxonomies are the dictionaries of words needed by different users, with distinct shared vocabularies. These vocabularies might relate to financial statements, sustainability, or any other business data. As reporting requirements are different in different parts of the world, and in different reporting environments (for example in large corporates versus SMEs, and in specialised sectors such as banking and insurance) there are many different taxonomies, for different purposes.

Who creates taxonomies?

Most taxonomies are developed and maintained by standards setters, regulators and similar national and international bodies, in accordance with their own reporting needs.

Taxonomies, like reporting requirements, can be built on international baselines: for example, in the financial sphere, the IFRS Accounting Taxonomy represents the IFRS standards, with specific regions and countries sometimes adding local adjustments and additions. Others are national or regional, such as the US FASB, Japanese GAAP or European Banking Authority requirements.

You can find taxonomies in use around the world with the XBRL Taxonomy Registry.

What does a taxonomy include?

Taxonomies often contain a very rich set of information. Each taxonomy is published as a set of files known as a taxonomy package.

All taxonomies establish computer-readable tags for business concepts, as well as important accompanying information and conditions that reported data should meet. Taxonomies require that when organisations report a fact they must also include key attributes that ensure consistent reporting, such as the correct currency or unit for a numerical fact, or the time period it covers. ‘Calculations’ capture simple required relationships between concepts, for example where fact a + fact b = fact c.

Many taxonomies also incorporate additional validation rules, which enable in-depth automated data-quality checks. These are highly varied, and are tailored to reporting requirements. They can apply to just a single concept, or capture complex relationships. If an XBRL report is submitted where the facts don’t follow the rules in the taxonomy, software can flag a warning for review.

Taxonomies also include labels for tags and other components, such as dimensions, data types or validation rules. These supply short human-readable descriptions that make the concept clear for users. For example, the computer-readable tag “ProfitLoss” – or something less easy to read like “FS0115” – could have a label of “net annual earnings.” Extra labels can provide short descriptions, instructions, and other information. Labels are often included in multiple languages, allowing automated language switching by users, and access to corporate data by a wider audience.

Most taxonomies also provide ‘references’ for concept definitions, with links to authoritative sources, such as accounting standards or local laws.

Taxonomies are sometimes described as hierarchical since we tend to arrange concepts this way. For example, the ‘assets’ parent concept is the sum of current and non-current assets, and current assets are further divided into cash, accounts receivable, stock, and so on.

Some useful, universal definitions

Some concepts are used across many different reporting requirements, so that it makes sense to define them in a single shared ‘definitional taxonomy.’

XBRL International provides Country Code and Currency Code Taxonomies, which are essentially lists of ISO codes for countries and currencies, making it easy for any XBRL taxonomy to refer to these codes.

XBRL International also maintains the Legal Entity Identifier Taxonomy, which provides a standard way of including LEIs in XBRL reports.

To find the latest versions of XBRL International-created taxonomies, please go to the XBRL Taxonomy Registry, search for “XRBL International” and sort by date.

In addition, XBRL International maintains several registries. These provide centralised lists of definitions, which taxonomy authors can re-use where these are helpful, fostering data compatibility.

Taxonomy, or taxonomy?

The word “taxonomy” is used in numerous fields to mean a way of structuring and organising information. In particular, XBRL or digital taxonomies should not be confused with “green” or “environmental” taxonomies. These terms are used in sustainability reporting in the EU and various other countries to refer to a system of classifying business activities according to their environmental impacts. A single reporting framework can include both an XBRL taxonomy and a green taxonomy – which we agree is occasionally bewildering!

More information

The XBRL Glossary has precise technical definitions for types of XBRL taxonomies, taxonomy components, and other essential reporting terms.

A wealth of Guidance relating to XBRL taxonomies is available. If your organisation is new to XBRL and you need to build an XBRL taxonomy, the best place to start is the XBRL Taxonomy – Quick Start Guide, which will take you through the decisions involved in developing a taxonomy and, wherever possible, direct you to further detailed guidance at each step.

Our public registry of published taxonomies is at the XBRL Taxonomy Registry.