The State and Local Government Disclosure Modernization Working Group, formed by XBRL US, is the national consortium for business-reporting standard. The industry-working group focuses on using standards to improve the efficiency of data collection and analysis of the financial performance of government entities.
The working group is basing its work on research by Neal Snow, assistant professor of accounting at Lehigh, and his colleague Jacqueline Reck, the James E. and C. Ellis Rooks Distinguished Professor in Accounting at the University of South Florida. Snow and Reck have developed a taxonomy that facilitates standardization of municipal financial reports. The goal is to keep financial reports uniform, consistent and standardized, and improve comparability and consistency in government reporting.
Earlier, governments used their own headings on reports and hence the labeling was inconsistent. The inconsistencies in labeling made it difficult for people to read and compare data over time or between municipalities. Therefore, to develop the taxonomy, Snow and Reck researched and looked through hundreds of municipal statements beginning in 2011. They first extracted the headings and subsequently took frequency counts of the most common terms used. This helped Snow and Reck compile a taxonomy containing 194 terms that would sufficiently encompass the headings of financial reports. The standardization of headings has made the data much more readable and comprehensible for the public.
Click here to read the article “Research in Action: Neal Snow’s Municipal Financial Reporting Taxonomy Informs Best Practices.”
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