A taxonomy is a classification system that can be used to identify and structure information so it is easy for a consumer to find. For example, a retailer may use a taxonomy for products it is selling online. This taxonomy is likely to include codes and labels that uniquely identify each product and provide information about the products, such as short descriptions, expected delivery times and references to physical shops where the products are available. The retailer is also likely to classify products by category, size, colour and price range. This taxonomy would allow online shoppers to quickly find, review and select specific products. Shoppers would be able to spend their time reviewing products rather than sifting through information.
Taxonomies are also used to allow information to be tagged and exchanged in a structured electronic format so that it can be accessed quickly and processed cost-effectively by the intended recipient of that information. For example, a shopper can place an online order by selecting a specific product. The retailer can automatically process the shopper’s selection using the underlying computer code of that product.
What is the IFRS Taxonomy and what are its objectives?
The IFRS Taxonomy is published by the International Accounting Standards Board (Board) and the IFRS Foundation (Foundation) to facilitate electronic reporting of financial statements prepared in accordance with IFRS Standards. It includes:
(a) the full IFRS Taxonomy, which applies to financial statements prepared in accordance with the full IFRS Standards;
(b) the IFRS Taxonomy for SMEs, which applies to financial statements prepared in accordance with the IFRS for SMEs® Standard; and
(c) the IFRS Taxonomy for Management Commentary, which applies to IFRS Practice Statement Management Commentary.
The IFRS Taxonomy lists and defines the specific codes (elements) that preparers can use to identify (tag) the information disclosed within IFRS financial statements. The IFRS Taxonomy also includes content that describes the accounting meaning of an element or helps a preparer find the correct element. Elements are organised into distinct groups to make it easier to navigate the IFRS Taxonomy.
Tagging information makes it easier for users to find a particular disclosure within a set of IFRS financial statements, for example, by searching for specific elements. Tagging facilitates, but does not replace analysis—it enables users to quickly and cost-effectively process, store and analyse data using appropriate software and tools. Tagging supports better communication between preparers and users of IFRS financial statements, and is essential to users that prefer to view and receive information in a structured electronic format.
To understand a tagged disclosure, users should consider related information about that disclosure. That related information might include narrative explanations or accounting policies for the disclosure or a disaggregation of an amount disclosed.
It’s difficult to anticipate everything that can happen, because every breach is different. However, running incident scenarios against your actual inside response procedures is often enough.
A preparer can express information related to an IFRS disclosure in a computer-readable format. For example:
(a) the IFRS Taxonomy includes elements for tagging narrative explanations or accounting policies; and
(b) XBRL calculations can be used to express a disaggregation.
The IFRS Taxonomy does not drive or prescribe the content and presentation of IFRS financial statements—
it provides a means of tagging IFRS disclosures.
Read More: All information sources from, IFRS® Foundation International Accounting Standards Board
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USING THE IFRS TAXONOMY: A PREPARER'S GUIDE BY THE IFRS FOUNDATION
THIS GUIDE HELPS PREPARERS UNDERSTAND THE CONTENT OF THE IFRS TAXONOMY. UNDERSTANDING THE STRUCTURE OF THE IFRS TAXONOMY AND HOW IT IS INTENDED TO BE USED CAN IMPROVE THE QUALITY AND CONSISTENCY OF THE DATA TAGGING APPLIES TO IFRS DISCLOSURES.