Dividend Decision and XBRL

Introduction
• Meaning of Dividend:
✔ A dividend is a distribution of a portion of a company's earnings to its
shareholders.
✔ It represents a return on investment for shareholders and can be
seen as a way for companies to share profits with those who have
invested in them.
✔ Dividends are typically paid in cash or additional shares and are an
important aspect of many investors' income strategies.
 1. Cash Dividends:
Forms of Dividend
•The most common form, where shareholders receive direct cash payments.
•Usually paid on a per-share basis (e.g., $1 per share).
•Payments are often made on a regular schedule (quarterly, semi-annually, or annually).
2. Stock Dividends:
•Instead of cash, shareholders receive additional shares of the company.
•Increases the total number of shares owned but does not affect overall value (total equity remains the same).
•Commonly expressed as a percentage
(e.g., a 10% stock dividend means shareholders receive 1 additional share for every 10 shares owned).
3. Property Dividends:
•Distribution of assets other than cash, such as products or real estate.
•Less common and usually used when a company has excess inventory or wants to distribute specific assets.
4. Special Dividends:
•One-time payments that occur outside of regular dividend schedules.
•Often distributed after particularly strong earnings or asset sales, signaling a surplus of cash.
•Not expected to be repeated regularly.
5. Liquidating Dividends:
•Paid when a company is partially or fully liquidating its assets.
•Represents a return of capital to shareholders rather than a distribution of profits.
•May occur during mergers, acquisitions, or the winding down of business operations.
 Dividend Decision
• The dividend decision is a critical aspect of corporate finance that
determines how a company allocates its profits.
• This decision involves evaluating whether to distribute profits to
shareholders as dividends or reinvest them back into the business for
growth.
Key Components of the Dividend Decision
1. Purpose of Dividends:
•Provide a return to shareholders.
•Signal financial health and stability.
•Attract and retain investors.

2. Factors Influencing Dividend Decisions:

•Profitability: Higher profits typically support higher dividends.
•Cash Flow: Companies need adequate cash to sustain dividend payments.
•Debt Levels: High leverage may limit available cash for dividends.
•Growth Opportunities: Companies with better reinvestment prospects may prefer retaining earnings.
•Tax Considerations: Different tax treatments on dividends versus capital gains can affect decisions.
•Market Conditions: Economic environment and competitive landscape can influence dividend policies.
Key Components of the Dividend Decision
3. Theoretical Approaches:
•Modigliani and Miller's Theory: Suggests that dividend policy does not affect company value in a
perfect market.
•Walter Model: Advocates for dividends when the return on investment exceeds the cost of equity.
•Gordon Growth Model: Values stocks based on future dividend payments and growth rates.

4. Types of Dividend Policies:

•Stable Dividend Policy: Aims for consistent dividend payments, regardless of earnings fluctuations.
•Constant Dividend Policy: Distributes a fixed percentage of earnings as dividends.
•Residual Dividend Policy: Pays dividends from remaining earnings after all profitable investments
are financed.
•Progressive Dividend Policy: Gradually increases dividends over time to signal growth.
Key Components of the Dividend Decision
5. Implications of Dividend Decisions:
•Investor Perception: Dividend changes can signal management’s confidence in future earnings.
•Market Reactions: Dividend announcements often lead to stock price adjustments
based on investor sentiment.
 Modigliani and Miller’s Approach
• The Modigliani-Miller Theorem, proposed by economists, Franco
Modigliani and Merton Miller in the 1950s, revolutionized the
understanding of corporate finance, particularly concerning dividend
policy.
• Their key insights emphasize that, under certain conditions, a
company's dividend policy does not affect its overall value.
 Modigliani and Miller’s Approach
• Key Concepts
1. Perfect Capital Markets Assumption:
1. Modigliani and Miller’s approach is based on the premise of perfect capital markets, where:
1. No taxes exist.
2. There are no transaction costs.
3. Information is symmetric (all investors have access to the same information).
4. Investors can borrow and lend at the same interest rate as the company.
2. Irrelevance of Dividend Policy:
1. Under these ideal conditions, the choice of how much profit to retain versus how much to
distribute as dividends does not affect the company's total value or the wealth of shareholders.
2. Investors can create their own "homemade dividends" by selling shares if they desire cash,
regardless of whether the company pays dividends.
3. Capital Structure Independence:
1. The M&M theorem also asserts that a firm's value is determined solely by its earning power and
risk, not by how it chooses to distribute dividends or by its capital structure (the mix of debt and
equity financing).
 Modigliani and Miller’s Approach
• Implications of the M&M Approach
1. No Dividend Preference:
Shareholders should be indifferent between dividends and capital gains, as they
can achieve their desired cash flow through personal transactions.
2. Investment Decisions Matter More:
The focus should be on investment decisions (the projects a company
undertakes) rather than on how profits are distributed.
3. Market Reactions:
While the M&M theorem holds in theory, in reality, markets are not perfect.
Factors such as taxes, agency costs, and market imperfections can lead to
varying preferences for dividends among investors.
 Modigliani and Miller’s Approach
Critiques and Limitations
• Real-World Considerations:
• Taxes: In many jurisdictions, dividends are taxed differently than capital gains,
affecting investor preferences.
• Transaction Costs: In practice, selling shares incurs costs that can make homemade
dividends less attractive.
• Asymmetrical Information: Managers typically have more information than
shareholders, which can influence dividend policies as signals of company health.
Conclusion
• The Modigliani-Miller approach provides a foundational theoretical framework that
underscores the independence of dividend policy from corporate value in perfect
markets. While it highlights the importance of focusing on investment decisions,
real-world complexities often lead companies to adopt specific dividend policies
that align with shareholder preferences and market conditions.
 Walter Model
• The Walter Model, developed by economist James E. Walter in 1963,
offers insights into the relationship between a company's dividend
policy and its value, particularly focusing on the return on investment
(ROI) and the cost of equity.
• The model helps to determine the optimal dividend payout policy
based on the firm's internal rate of return compared to the cost of
equity capital.
 Walter Model
• Key Components of the Walter Model
1. Assumptions:
1. The model assumes a constant rate of return on investments and a stable growth rate in dividends.
2. It also presumes a closed economy where all earnings are either reinvested or paid out as dividends.
2. Parameters:
1. Earnings per Share (EPS): The company's net income divided by the number of outstanding shares.
2. Dividend per Share (D): The portion of earnings distributed to shareholders.
3. Retention Ratio (b): The proportion of earnings retained for reinvestment, calculated as b=1−(Dividend Payout Ratio).
4. Cost of Equity (r): The return required by equity investors.
5. Return on Investment (ROI): The return generated from retained earnings.
3. Decision Criteria:
1. If ROI>r (return on investment is greater than the cost of equity):
The firm should retain earnings to finance profitable investments, as this will maximize shareholder wealth.
1. If ROI<r:
The firm should distribute dividends, as retaining earnings would not provide adequate returns for shareholders.
 Walter Model
• Dividend Policy Implications
1. Optimal Dividend Policy:
The model suggests that the optimal dividend policy depends on the relationship
between ROI and the cost of equity. Companies should adjust their dividend policies
based on these metrics to enhance shareholder value.
2. Growth and Retention:
Companies with higher ROI than their cost of equity are incentivized to reinvest
earnings, leading to growth in both the company and its dividends over time.
3. Impact on Shareholder Wealth:
The model illustrates that a company’s dividend policy directly impacts its market
price and overall valuation. Consistent with the predictions of the model, companies
that effectively manage their dividends in line with their ROI and cost of equity will
create more value for shareholders.
 • Critiques and Limitations
•Simplistic Assumptions:
Walter Model
The model assumes constant ROI and does not account for changing market conditions,
business cycles, or varying investment opportunities.
•Market Conditions:
Real-world factors such as taxes, investor preferences, and market imperfections can influence actual
dividend policy beyond what the Walter Model suggests.
•Asymmetrical Information:
The model does not consider the potential signaling effects of dividends, where changes in
dividend policy may signal management’s expectations about future profitability.

Conclusion
The Walter Model provides a theoretical framework for understanding the optimal dividend policy based
on the comparison of ROI and the cost of equity. It emphasizes that firms should align their dividend
strategies with their investment returns to maximize shareholder wealth, although its assumptions may not
fully reflect the complexities of real-world financial markets.
 Gordon Model
• The Gordon Growth Model (GGM), also known as the Dividend
Discount Model (DDM), is a method for valuing a stock based on the
present value of its future dividend payments.
• Developed by Myron J. Gordon in the 1960s, this model assumes that
dividends will grow at a constant rate indefinitely.
 Gordon Model
• Key Components of the Gordon Model
1. Assumptions:
1. Dividends will grow at a constant rate (g) over time.
2. The required rate of return (r) remains constant.
3. The company is expected to continue paying dividends indefinitely.
2. Formula: The formula for the Gordon Growth Model is:
P0=D1/r−g
Where:
1. P0 = Present value of the stock (price per share).
2. D1 = Dividend expected next year.
3. r = Required rate of return.
4. g = Growth rate of dividends.
1. Dividends:
The model uses the next expected dividend which can be calculated as:
D1=D0×(1+g)
Where D0 is the most recent dividend paid.
 Gordon Model
• Implications of the Gordon Model
1. Value of Growth:
1. The model highlights the importance of dividend growth. A higher growth rate (g) or
lower required return (r) increases the present value of the stock.
2. Investor Expectations:
1. Investors can determine whether a stock is fairly valued based on the dividends it
pays and its growth potential. If the calculated price is higher than the market price,
the stock may be undervalued.
3. Use in Valuation:
1. The Gordon Growth Model is particularly useful for valuing companies with a stable
dividend history and predictable growth rates, such as utilities or mature firms.
 Gordon Model
• Critiques and Limitations
1. Constant Growth Assumption:
The assumption of constant growth is often unrealistic, as companies may experience varying growth rates over time
due to market conditions or changes in business strategy.
2. Sensitivity to Inputs:
Model is highly sensitive to the growth rate (g) and required return (r). Small changes in these parameters can
significantly affect the estimated stock price.
3. Limited Applicability:
It is less suitable for companies that do not pay dividends or for firms with erratic dividend policies, as it relies on dividend
payments as the primary source of value.
4. Market Conditions:
The model does not account for macroeconomic factors or market conditions that can affect stock prices independently of
dividends.
• Conclusion
The Gordon Growth Model is a valuable tool for valuing stocks based on expected future dividends and their
growth. While it provides a clear framework for understanding the relationship between dividends and stock price,
investors should be cautious of its assumptions and limitations, particularly regarding constant growth and its
applicability to different types of companies.
 Factors determining Dividend Policy
• The dividend policy of a company is influenced by a variety of internal and external
factors. Understanding these factors can help management decide on the most
appropriate approach to dividend distribution. Here are the key factors:
1. Profitability:
Companies with higher profits are generally more capable of paying dividends.
Consistent earnings provide the necessary cash flow for regular dividend payments.
2. Cash Flow:
Sufficient cash flow is essential for paying dividends. Companies may report profits
on paper but still face cash flow issues that prevent them from distributing dividends.
3. Debt Levels:
High levels of debt can restrict a company's ability to pay dividends, as funds may
need to be allocated for interest and principal repayments. Companies with lower
leverage may have more flexibility to distribute earnings.
 Factors determining Dividend Policy

4. Retention Ratio:
The proportion of earnings retained for reinvestment versus distributed as dividends influences dividend policy.
Companies aiming for growth may choose to retain a larger share of earnings.
5. Investment Opportunities:
Firms with attractive investment opportunities may prefer to reinvest earnings rather than distribute them as
dividends. A strong pipeline of profitable projects can justify lower dividend payouts.
6. Tax Considerations:
Different tax treatments for dividends and capital gains can influence dividend policy.
For instance, if dividends are taxed more heavily than capital gains, companies might prefer to retain
earnings to enhance shareholder value through stock price appreciation.
 Factors determining Dividend Policy
7. Market Conditions:
Economic conditions and market sentiment can impact dividend policy. In uncertain times,
companies may choose to conserve cash and reduce dividends, while strong economic
conditions may encourage higher payouts.
8. Company Policy and Philosophy:
Management philosophy regarding dividends can play a significant role. Some companies
. adopt a stable dividend policy, while others may prioritize growth or reinvestment strategies.
9. Shareholder Expectations:
•The preferences of shareholders can influence dividend policy. Income-focused investors
•may favor regular dividends, while growth-oriented investors might prefer reinvestment in the company.
 Factors determining Dividend Policy
10. Regulatory Environment:
Legal and regulatory constraints may affect a company’s ability to pay dividends.
Certain jurisdictions may have laws governing minimum dividend payments or restrictions based
on financial ratios.
11. Economic Stability:
The overall economic environment can influence dividend policies. Companies may be more conservative
in their dividend distribution during economic downturns.
12. Industry Norms:
Different industries have varying norms regarding dividends.
For example, utility companies often have stable dividends, while tech firms may reinvest most earnings
into growth.
. Conclusion
Dividend policy is shaped by a complex interplay of factors, including profitability, cash flow, market conditions,
and shareholder preferences. Companies must consider these elements carefully to formulate a dividend
strategy that aligns with their overall financial goals and stakeholder expectations.
 Types of Dividend Policy
• Companies adopt different dividend policies based on their financial strategies,
market conditions, and shareholder expectations. Here are the main types of
dividend policies:
1. Stable Dividend Policy:
1. Aims for consistent and predictable dividend payments, regardless of fluctuations in
earnings.
2. Companies may establish a target payout ratio and adjust dividends gradually to maintain
stability.
3. This policy is attractive to income-focused investors who prefer regular cash flow.
2. Constant Dividend Policy:
1. Dividends are paid as a fixed percentage of earnings.
2. This approach can lead to variable dividend amounts depending on the company's
profitability each period.
3. While it aligns dividends with earnings, it can create uncertainty for shareholders regarding
cash flow.
 Types of Dividend Policy
3. Residual Dividend Policy:
•.Dividends are paid from the remaining earnings after financing all profitable investment opportunities.
•This policy prioritizes reinvestment in growth projects, which can lead to fluctuating dividend payments.
•It is suitable for firms with varying investment opportunities and cash flow needs.
4. Progressive Dividend Policy:
•Aims for gradual increases in dividends over time, reflecting the company’s growth and profitability.
•This approach signals confidence in future earnings and helps to attract long-term investors.
•Companies using this policy often aim to maintain a stable payout ratio over time.
5. Hybrid Dividend Policy:
•Combines elements of different dividend policies, allowing for flexibility based on financial performance
and market conditions.
•For example, a company might have a stable base dividend but also provide special dividends in profitable years
•This approach can help balance the needs of different types of investors.
 Types of Dividend Policy
6. Special Dividend Policy:
1. Involves one-time dividend payments that occur outside the regular dividend
schedule.
2. Often paid when a company has excess cash due to extraordinary earnings or
asset sales.
3. This policy can be used to reward shareholders without committing to ongoing
increases in regular dividends.
• Conclusion
The choice of dividend policy depends on various factors, including the
company’s financial health, growth prospects, shareholder expectations,
and market conditions. Each type of policy has its advantages and
disadvantages, and companies must carefully evaluate their strategy to
 XBRL (eXtensible Business Reporting
Language)
• XBRL is a standardized language for the electronic communication of business and financial data. It allows for the organization,
analysis, and sharing of financial information in a way that is both machine-readable and human-readable. Here are the key
aspects of XBRL:
• Key Features
1. Standardization:
XBRL provides a uniform framework for reporting financial data, making it easier for organizations to prepare and present
information consistently.
2. Tags for Data:
Financial statements and other business reports are tagged with XBRL codes that define their meaning. Each piece of data is
associated with a specific tag, which enhances clarity and reduces ambiguity.
3. Interoperability:
XBRL facilitates data exchange between different systems and organizations. It can be used across various software applications and
platforms, improving efficiency in reporting and analysis.
4. Data Validation:
The use of XBRL allows for automatic validation of data. This reduces errors and ensures compliance with financial reporting standards.
5. Real-Time Reporting:
XBRL enables real-time data reporting and analysis, making it easier for stakeholders to access up-to-date financial information.
 XBRL (eXtensible Business Reporting
Language)
• Benefits
1. Enhanced Transparency:
By providing standardized financial data, XBRL enhances transparency and
comparability across companies and industries.
2. Improved Data Analysis:
Analysts and investors can easily extract and analyze data from XBRL reports, leading
to more informed decision-making.
3. Cost Efficiency:
Automating the reporting process through XBRL can reduce costs associated with data
collection, preparation, and distribution.
4. Regulatory Compliance:
Many regulatory bodies, such as the SEC in the United States, require the use of XBRL
for financial reporting, facilitating compliance with regulations.
 XBRL (eXtensible Business Reporting
Language)
• Applications
1. Financial Reporting:
1. Companies use XBRL for their financial statements, making it easier for
regulators and investors to access and analyze their data.
2. Data Aggregation:
1. Financial institutions and analysts use XBRL to aggregate data from multiple
sources for comparative analysis.
3. Tax Reporting:
1. Some jurisdictions utilize XBRL for tax filings, enhancing the accuracy and
efficiency of tax reporting processes.
 XBRL (eXtensible Business Reporting
Language)
• Challenges
1. Implementation Costs:
1. While XBRL can reduce long-term reporting costs, the initial implementation can be
resource-intensive for organizations.
2. Complexity:
1. Understanding and utilizing XBRL requires technical expertise, which can pose challenges
for some organizations.
3. Standardization Issues:
1. Variability in the application of XBRL standards can lead to inconsistencies in data
reporting.
• Conclusion
XBRL is a powerful tool for modernizing and enhancing the efficiency of financial
reporting and data analysis. By enabling standardized and machine-readable
reporting, it promotes greater transparency, accuracy, and accessibility of financial
information for all stakeholders.
Advantages of XBRL
1. Improved Accuracy and Reduced Errors
• Automation: XBRL allows for automated data entry, reducing the risk of human errors that can occur with
manual data entry or traditional paper-based reporting systems.
• Validation: XBRL tags can be validated to ensure that the information is consistent, complete, and conforms to
regulatory and business standards. This helps in minimizing discrepancies and mistakes.
2. Increased Transparency
• XBRL makes it easier for investors, regulators, and other stakeholders to analyze and compare financial data
across different organizations, regardless of geographical location or industry.
• Financial reports in XBRL format can be more detailed and consistent, improving the overall transparency of
financial information and aiding in better decision-making.
3. Cost Efficiency
• Streamlined Reporting: Automating the process of financial reporting reduces the time and resources required
for data collection, preparation, and submission.
• Reduced Compliance Costs: Since many regulatory bodies (like the SEC in the U.S. or ESMA in Europe) have
adopted XBRL, organizations can file their reports electronically, reducing the cost of printing and mailing
documents.
Advantages of XBRL
4. Enhanced Comparability
• XBRL allows for the standardization of financial data, making it easier to compare financial statements across
companies, industries, or time periods. This is especially valuable for analysts, investors, and researchers.
5. Better Data Integration
• XBRL facilitates easy integration with other financial systems and software applications. By using a standard
data format, companies can connect their financial data with accounting systems, enterprise resource planning
(ERP) systems, and business intelligence tools, leading to faster and more accurate reporting.
• It enables easier exchange of information between different organizations, reducing the complexity of
cross-company data sharing.
6. Real-time Reporting and Accessibility
• XBRL enables real-time reporting and the ability to submit updates quickly. It allows regulators and
stakeholders to access the most up-to-date information in a standardized format, facilitating timely
decision-making and oversight.
• XBRL is platform-independent, meaning that it can be accessed by anyone with an internet connection and the
appropriate software, which increases the accessibility of data.
Advantages of XBRL
7. Consistency with International Standards
• XBRL is used globally by various regulatory bodies and organizations, making it easier to comply with
international financial reporting standards. It helps organizations standardize financial reports according to local
or international standards like IFRS or GAAP.
8. Enhanced Decision-Making
• Financial data presented in an XBRL format can be more easily analyzed using various data analytics tools,
providing decision-makers with deeper insights into an organization’s financial health.
• It allows for better tracking of financial performance over time and across different metrics, leading to more
informed decision-making.
9. Sustainability and Future Proofing
• As a digital and adaptable format, XBRL is well-suited for the future of financial reporting. It can evolve as
standards change and can accommodate additional types of data (e.g., non-financial, ESG metrics).
• XBRL's flexibility also makes it easier to incorporate emerging technologies like machine learning and AI to
enhance financial analysis and reporting.
Advantages of XBRL
10. Regulatory Compliance
•Regulatory bodies across the world (like the SEC in the U.S., ESEF in Europe, and others)
require or encourage the use of XBRL for financial reporting. This compliance reduces the risk
of penalties or legal challenges due to non-compliance.
•XBRL also helps to streamline the audit process since auditors can access financial data in a
consistent format, making audits faster and more reliable.
11. Facilitates Consolidation and Aggregation
•XBRL simplifies the process of consolidating financial statements from multiple subsidiaries or
departments within a company, as it standardizes data across various entities. This makes it
easier for multinational companies to generate group-level financial reports.
12. Ease of Analysis and Visualization
•The structured nature of XBRL data allows analysts to more easily extract, analyze, and
visualize key financial metrics, which can improve financial modeling and forecasting.
Disadvantages of XBRL
1. Initial Implementation Costs
• Setting up XBRL requires significant investment in software, training, and infrastructure.
• Smaller organizations may find the costs burdensome compared to the perceived benefits.
2. Complexity
• XBRL's detailed taxonomy and tagging process can be challenging, requiring specialized knowledge.
• Errors in tagging can lead to inaccurate data or misinterpretation.
3. Time-Consuming Process
• Tagging financial data manually or semi-automatically can be time-intensive.
• Ensuring compliance with specific jurisdictional standards adds to the workload.
Disadvantages of XBRL
4. Quality of Data
• The usefulness of XBRL depends on the quality and accuracy of the data input.
• Inconsistent or incorrect tagging reduces its effectiveness.
5. Dependence on Technology
• XBRL requires advanced software tools and systems for preparation, validation, and analysis.
• Companies need ongoing technical support, which can be costly.
6. Limited Expertise
• The specialized knowledge required for effective XBRL implementation may not be readily available
within organizations.
• External consultants or training programs are often necessary, increasing expenses.
Disadvantages of XBRL
7. Compatibility and Standardization Issues
• Different jurisdictions and industries may adopt varying taxonomies, leading to compatibility challenges.
• The lack of a universal standard can hinder global adoption and interoperability.
8. Potential Resistance to Change
• Employees and stakeholders may resist transitioning from traditional reporting methods to XBRL.
• Change management can be a significant challenge.
9. Cybersecurity Risks
• As a digital format, XBRL data is susceptible to hacking and other cybersecurity threats.
• Organizations must invest in robust security measures to protect sensitive financial information.
10. Regulatory Challenges
• Regulatory requirements for XBRL reporting may vary across regions, adding complexity for multinational companies.
• Keeping up with changes in reporting standards can be difficult.
Users of XBRL
1. Regulators and Government Agencies
• Purpose: To monitor compliance, streamline regulatory reporting, and ensure transparency.
• Examples:
• Securities and Exchange Commissions (e.g., U.S. SEC).
• Tax authorities (e.g., IRS, HMRC).
• Central banks and financial regulatory bodies.
2. Companies and Corporations
• Purpose: To prepare, file, and disseminate financial reports efficiently.
• Examples:
• Publicly traded companies for investor disclosures.
• Private companies for internal reporting or regulatory compliance.
Users of XBRL
3. Investors and Analysts
• Purpose: To analyze financial statements, assess investment opportunities, and make informed
decisions.
• Benefits:
• Easier comparison of financial data across companies.
• Access to detailed, machine-readable data.
4. Auditors and Accountants
• Purpose: To validate the accuracy of financial data, ensure compliance, and improve the auditing
process.
• Benefits:
• Automated checks for errors or inconsistencies.
• Improved audit trail and transparency.
Users of XBRL
5. Financial Institutions and Credit Rating Agencies
Purpose: To evaluate financial health, assess creditworthiness, and
support lending or investment decisions.
Examples: Banks using XBRL for loan risk assessments, Rating agencies
analyzing company reports.
6. Software Providers and Data Aggregators
Purpose: To develop tools for XBRL data preparation, validation, and
analysis.
Examples: Providers of financial reporting software, Companies
offering analytics platforms (e.g., Bloomberg, Thomson Reuters).
Users of XBRL
7. Stock Exchanges
• Purpose: To standardize financial disclosures from listed companies
and facilitate data accessibility for investors.
• Examples: NYSE, NASDAQ, London Stock Exchange.
8. Academics and Researchers
• Purpose: To study trends, evaluate financial policies, or conduct
economic and financial research.
• Benefits:
• Access to structured, comparable data for empirical studies.
Users of XBRL
9. Non-Governmental Organizations (NGOs) and Advocacy Groups
• Purpose: To promote transparency, accountability, and governance in
corporate reporting.
• Examples: Organizations monitoring ESG (Environmental, Social, and
Governance) disclosures.
10. Standard-Setting Bodies
• Purpose: To develop and refine taxonomies and frameworks for financial
reporting in XBRL.
• Examples: International Accounting Standards Board (IASB).
• Financial Accounting Standards Board (FASB).