IFRS Taxonomy and financial reporting practices: The case of Italian listed companies

XBRL taxonomies have a crucial role in digital financial reporting. On the one hand, they provide a unique set of computer-readable tags to allow the interchange of interactive information. On the other hand, a systematic, agreed-upon convention for naming each taxonomy tag is needed. In this context, the IFRS Foundation is playing a relevant role in developing well-structured taxonomies, which could simulta- neously favor both the interoperability and the homogenization of the firms' financial information at the global level. Due to its impor- tance, XBRL is being applied in many countries, but according to dif- ferent implementation schemas. In this study, we attempt to verify if the IFRS Taxonomy released by the IFRS Foundation adequately reflects the reporting practices of the Italian listed companies for which XBRL is not yet required. The results reveal a general discrepancy between the financial items dis- closed by the companies and the taxonomy tags. Specifically, we no- ticed that the financial statements items are more disaggregated than the taxonomy tags and that this depends on the sector and the size of the companies. Unless the XBRL implementation system ex- plicitly allows companies to use and disclose taxonomy extensions, a loss of detailed information occurs if the taxonomy is applied.