US GAAP Taxonomy
What is taxonomy?
To define in general, taxonomy refers to a statistical technique that recognizes clusters of stocks that feature highly correlated returns with every individual cluster and comparatively uncorrelated across clusters. The word has been derived from Greek words ‘taxis’ meaning division or arrangement and ‘nomos’ meaning law. The word can be explained as the science of classification on the basis of an encoded system, with the resulting catalog used to give a conceptual framework for analysis, discussion, or information retrieval.
Defining and explaining US GAAP Taxonomy
The US GAAP Taxonomy refers to the collection of eXtensible Business Reporting (XBRL) tags used by companies for labeling the financial data that makes up financial reports and other allied disclosure statements. The US GAAP taxonomy delineates the concepts existing within a group. Therefore, while working with a balance sheet item like cash, the taxonomy would also explain how cash may recount to other balance sheet items (contained by the taxonomy) like rolling up to Current Assets and in the long run Total Assets.
All the three items mentioned above, i.e. cash, current assets, and total assets, are financial concepts which are delineated and presented in the taxonomy as elements. The US GAAP Taxonomies constitute more than 15,000 elements that represent commonly reported financial concepts for US GAAP financial statements. Besides, these taxonomies are available and maintained by XBRL US.
‘Component’ in US GAAP Taxonomy
A “component” in US GAAP Taxonomy is basically a piece of a Table (an organization of components or concepts which harmonize in some way for some purpose and share the same [Axis].) that contains an information model. A Table is defined by its constituents or the need for those constituents. Moreover, every table needs to be unique.A component is modeled in a specific way which could be a [Roll Forward], a [Roll Up], a [Hierarchy], an [Adjustment], a [Grid], and a [Text Block]. A component is, however, made up of concepts. A concept can be explained as the lowest building block of the Taxonomy. These concepts are organized into components which are then expressed within a Table thus forming the Component.