US GAAP Taxonomy: Britannica model or Wikipedia model?
Monday, January 14, 2008 at 01:33PM
Charlie in US GAAP Taxonomy, XBRL General Information

In his book "The Long Tail" (which I highly recommend and if you don't know what a Long Tail is, you can read this), Chris Anderson provides some interesting insight between the differences between the printed version of the Encyclopedia Britannica and Wikipedia.  I am wondering if there is any insight there which might be applicable to the US GAAP Taxonomy.

Summarizing what Chris Anderson painstakingly details (it is worth reading there, this is only the cliffs notes version), Encyclopedia Britannica is a professionally created publication of about 80,000 articles, printed in English, is distributed once a year when it is published, and the quality range of the articles (on a scale of 1 to 10 with 10 being the highest) between 5 to 9 with an average quality of 7.

Wikipedia is a collaboration of some professionals but mostly passionate amateurs containing about 1 million articles, printed in English and seventy-five other languages, distributed real-time on the web (anyone can edit it anytime), and the quality range of the articles (on that same scale of 1 to 10, with 10 being the highest) between 0 and 10 with an average of about 5.

So the question is:  Which is better, Britannica or Wikipedia? 

He goes on to answer the question quite well in my view, "Wikipedia should be the first source of information, not the last."

Now, I am not suggesting that you want a bunch of amateurs creating the US GAAP Taxonomy and I am not suggesting that the taxonomy should be a wiki.  Clearly those creating the taxonomy need to understand financial reporting and clearly you cannot just go around changing things whenever you want.  I would contend that the first year of use of the taxonomy will provide more and better feedback than haggling over every detail.  I wonder what people's expectation is relating to quality.  Is there even a definition of what "quality" is and means for the taxonomy.  How is it measured and who has the ruler to measure it?  What does it need to be to be useful?

What does the US GAAP Taxonomy need to be?  I don't think that the answer is going to be only one or the other.  I think that the core will probably be regulator driven but that there will be a rich set of both privately available and publicly available extensions, translations, interpretations, supplemental information, etc.

What do you think the US GAAP Taxonomy should be more like, Britannica or Wikipedia?

 

 

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