The implementation of IFRS electronic financial reporting – XBRL and usefulness of financial information: evidence from Jordanian finance industry
Authors: Alharasis Esraa Esam 
Published: January 2025

Purpose
This study aims to compare the usefulness of financial information in the Jordanian finance industry before and after applying eXtensible Business Reporting Language (XBRL) as a new regulatory requirement under International Financial Reporting Standards (IFRS). Financial information usefulness is measured using the Nijmegen Centre for Economics (NiCE) disclosure index. This index examines IFRS-defined “qualitative characteristics of useful financial information”. These are relevance, faithful portrayal, understandability, comparison and timeliness.

Design/methodology/approach
To evaluate the formulated hypotheses, ordinary least squares regression analysis was used on a dataset consisting of 954 observations from the Jordanian financial industry, specifically the banking, insurance and real estate sectors, spanning the period from 2005 to 2022. The content analysis method has been used to quantify the extent of each characteristic of useful information disclosure.

Findings
The investigation validates that the utilisation of XBRL generally enhances the usefulness of financial information in terms of its “relevance, faithful representation, comparability, and timeliness”, although no association was found regarding the duration of understandability. To ensure effective adoption of XBRL in Jordan, it is essential to provide suitable infrastructure to XBRL suppliers and offer training to XBRL users.

Practical implications
This research advances the field and may be valuable in areas with minimal XBRL framework usage. This analysis can assist businesses in understanding how XBRL affects financial information quality in the age of technological adoption. The findings help regulators and policymakers monitor Jordanian enterprises’ technological adoption and propose IFRS-XBRL-compliant legislation. This could improve measurement and disclosure while protecting investors and integrity. Thus, this research shows that potential investors in Jordanian enterprises must understand and evaluate electronic financial report data. The findings affect business and policy, so executives, lawmakers and stockholders should evaluate them. As technology advances, practitioners and scholars must recognise XBRL’s potential to improve organisational values and effects. These findings can apply to Middle Eastern (ME) countries with similar institutional, cultural and accounting frameworks.

Originality/value
This study combines agency, signalling and stakeholders’ theories, motivational theories for technology adoption, institutional theories and technological acceptance theories to analyse how XBRL affects financial information. To the best of the author’s knowledge, no other scholarly study has examined how XBRL affects country-level financial information usefulness. This study illuminates XBRL’s country-level benefits and complements firm-level assessments. These are crucial for ME and Jordan’s economic growth. Jordanian data and the existing disclosure index of financial information usefulness are used for the first time to evaluate XBRL.