XBRL News

XBRL International and Lenz Consulting Group partner to host free webinar on ...
NewsReleaseWire.com (press release)
Lenz Consulting Group, Inc., in partnership with XBRL International, Inc., will present a webinar showcasing the purpose and benefits of the XBRL Versioning ...

SNL IR Solutions and PR Newswire Announce Strategic Partnership
PR-USA.net (press release)
In addition, PR Newswire will offer services to streamline compliance, such as XBRL filing and accurate conversions to HTML and ASCII for EDGAR filings. ...

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MetaMoJi receives HMRC recognition for its iXBRL-compliant MashIQ financial ...
Bobsguide (press release)
MetaMoJi Corporation, a leading XBRL (eXtensible Business Reporting Language) software supplier headquartered in Tokyo, Japan, is pleased to announce MashIQ ...

EDGAR Online Zeroes In On Mutual Funds for XBRL Business
Financial-Planning.com
The New York company, which in November completed a merger with XBRL software developer UBmatrix, said it firmed up strategic alliances with three financial ...

CARTES & IDentification 2010 News, Multimedia and Online Press Kits Available
Business Wire (press release)
Business Wire also handles XBRL tagging, document formatting and regulatory filing into the EDGAR and SEDAR systems. Communications professionals turn to ...

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An Essential Guide to the SEC XBRL Mandate Receive A Complimentary Copy of SEC ...
CFO.com Magazine
SEC XBRL Mandate For Dummies® is the reference book for readers looking to quickly understand the impact of the SEC XBRL mandate on their company, ...

SNL IR Solutions and PR Newswire Announce Strategic Partnership
PR Newswire (press release)
In addition, PR Newswire will offer services to streamline compliance, such as XBRL filing and accurate conversions to HTML and ASCII for EDGAR filings. ...

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EDGAR Online Expands XBRL Dominance Into the Mutual Funds Market With ...
PR Newswire (press release)
EDGAR Online is the provider of XBRL filing creation services to these companies and their clients, which represent more than 2000 separate mutual funds. ...

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Rivet Software Captures Lead in XBRL Marketplace
PR Newswire (press release)
7, 2010 /PRNewswire/ -- An independent analysis of Securities and Exchange Commission (SEC) financial filings on the XBRL Cloud EDGAR Dashboard through ...

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Written by Bob Schneider     Posted on December 4, 2010

Harvard Business School recently held the 2010 Workshop on Integrated Reporting to encourage the trend of combining financial and nonfinancial information — especially measures of environmental, social, and corporate governance (ESG) performance — in a single company report. The Landscape of Integrated Reporting: Reflections and Next Steps, an eBook available for free online, collects the thoughts and views of the workshop participants.  Two of the essays — by Maciej Piechocki and Olivier Servais, and by Brad Monterio and Liv Watson — specifically address the role of XBRL in facilitating integrated reporting. 

Company reporting of ESG — also known as corporate social responsibility or sustainability reporting — is making steady progress, at least among the world’s largest firms. According to the most recent KPMG Survey on Corporate Responsibility Reporting, nearly 80% of the world’s biggest companies issued corporate responsibility reports in 2007/2008, up from 50% three years earlier. More than three-quarters use GRI Guidelines for their reports. However, most companies still present ESG information in stand-alone reports, with perhaps a summary in a separate section of the company’s annual report. Only 3% of companies “fully integrate” corporate responsibility reporting with financial reporting in their ARs. (There’s a nice chart on page 16 of KPMG’s survey that shows the breakdown of stand-alone versus fully integrated reporting of companies by country.)

Already the emerging global language for financial reporting, XBRL now is gaining traction as a standard for nonfinancial information as well. In their essay “The Role of XBRL and IFRS in Integrated Reporting,” Piechocki and Servais enumerate a growing list of nonfinancial XBRL taxonomies under development:

The Global Reporting Initiative (GRI) has published the GRI Taxonomy to reflect GRI Sustainability Reporting Guidelines. The World Intellectual Capital Initiative (WICI) is conducting a similar effort in the area of intellectual capital and has developed a taxonomy that reflects Gartner and Enhanced Business Reporting Consortium metrics, management discussion and analysis, and the WICI framework. There is also interest in XBRL from projects such as the Prince’s Accounting for Sustainability Project, the Carbon Disclosure Project, and the International Integrated Reporting Committee. [p. 157 of the eBook]

The authors discuss the problem of comparability of nonfinancial information across XBRL reporting frameworks — a challenge similar to that faced in financial reporting, which Piechocki recently described in an interview with this blog. The authors believe the work of the ITA project in helping to ensure cross-border interoperability of IFRS, EDINET (Japan), and US GAAP taxonomies will yield important lessons for a similar alignment in integrated reporting.

In their essay “Bringing Order to the Chaos: Integrating Sustainability Reporting Frameworks and Financial Reporting into One Report with XBRL,” Monterio and Watson affirm the view that, as the de facto standard for financial reporting, XBRL is the logical choice for integrated reporting. They note two key challenges, however:

First, ESG reporting requires “commercial strength” taxonomies developed by “neutral, trusted” organizations. As yet, there are no such entities in the ESG field that can fund and maintain these required taxonomies.

Second, just as key stakeholders drove the adoption of XBRL for financial reporting, “many more influential leaders in the ESG community” must urge development of nonfinancial taxonomies and promote their adoption. [p. 165]

As the book’s 62 other essays well demonstrate, the number and breadth of issues raised by ESG reporting generally and integrated reporting specifically are enormous. One major problem noted by Ralf Frank in “Success Factors for Integrated Reporting: A Technical Perspective” is that

…unlike US-GAAP or IFRS, which are legally endorsed… the extra-financial reporting criteria are voluntary frameworks that, given their nature, allow companies a significant amount of leeway, including the ability not to report under these frameworks at all. [p. 226]

Another huge challenge is the extent to which the environment — economic, social, and, not least, political — for many ESG issues varies among countries. One prominent area is climate change: my Japanese friends are always amazed to learn that the role of human activity in global warming is far from being a settled issue in the US. As reported in the November 24 issue of BusinessWeek, the number of Americans who think the earth is warming because of man-made activity dropped to 34 percent in October 2010, from 50 percent in July 2006. The article goes on to note that recent US elections put into office 47 new lawmakers skeptical of climate change; any Congressional action on cap-and-trade, and even some less ambitious environmental legislation, appears dead for now.

In this light, the “cautionary note” on XBRL that Adam Kanzer offers in his essay “Toward a Model for Sustainable Capital Allocation” is interesting:

It seems to me to be somewhat ironic, however, to be discussing the concept of One Report and XBRL in the same breath. XBRL may be a very positive development, but it is also likely to accelerate the atomization of corporate reporting, undermining the integrity of the report itself. Investors will have even less incentive to read the corporate report as published, preferring to extract the data points their models call for. What gets lost is context, and context is critical to understanding corporate strategy and performance, particularly with respect to those sustainability factors that cannot generally be reduced to a data point. [p. 56]

I don’t know whether Mr. Kanzer’s concern that XBRL reduces the incentive to read the corporate report as published has validity. But it does seem that — in a world where there’s so much debate on just what the key ESG issues are, let alone how they should be reported — a data standard that can extract from a much larger report individual data points has distinct advantages for comparison and analysis. An atomized ESG scorecard is highly preferable to none at all.

Corporate responsibility and integrated reporting remain the exception rather than the rule: Michael Muyot of CRD Analytics states that of more than 75,000 multinational companies, only 3,500 (less than 5%) produce a sustainability/CSR/integrated report [p. 170]. But the essays in this book demonstrate that the trend lines for both corporate responsibility and integrated reporting will continue to slope upward – and that XBRL will have a vital role to play in their adoption.  
 

XBRL International Begins Roll-out of XBRL Abstract Modelling Initiative with ...
Business Wire (press release)
“Partner and Sponsor support will help us deliver a commercial strength XBRL Abstract Model to the marketplace within 8-10 weeks and drive further adoption ...
XBRL International Begins Roll-out of XBRL Abstract Modelling Initiative with ...EON: Enhanced Online News (press release)

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Written by Anne Leslie-Bini     Posted on November 23, 2010

Anne Leslie-Bini is a Paris-based freelance consultant who began her career in capital markets, working for major international banks such as BNP-Paribas and ABN Amro Group. Since 2009, Anne has been acting as an international business facilitator, accompanying European companies who wish to join the XBRL community and take advantage of the many opportunities offered by the technology. She can be contacted by email.

In one of his recent blog posts, Dan Roberts referred to Europe as “the quiet revolutionaries.” It is certainly true that there is a feeling in financial information and business reporting circles that the “old order is being swept away” and that XBRL is stepping in to the fill the breach.  

Unfortunately, what is sorely lacking in Europe is a harmonized pan-European equivalent to the SEC mandate for the disclosure of financial statement information in XBRL format or, as Dominic Jones so succinctly put it, “will Europe ever get its own EDGAR?” Vested interests, legacy investments, and the difficulties inherent in arriving at a binding Union-wide consensus mean that, while commendable progress can be made, the US experience has shown that a top-down regulatory mandate is indispensable in giving the jumpstart needed for the widespread adoption of XBRL.    

Within Europe, while national initiatives are extremely important, their scope and effect tend to be limited by their jurisdiction. The recent blog post by Bob Schneider highlights the danger that institutional myopia holds for the development of XBRL, and more generally, for the future of financial disclosure in Europe. What is needed is a high-level, cohesive and visionary initiative with sufficient resources and political clout behind it to propel it through the bureaucracy.

With 50 XBRL projects currently underway in 15 European countries, XBRL is clearly becoming increasingly pervasive with such large quantities of XBRL data circulating in Europe. Each of the three regulated sectors has its own views on XBRL, but the European banking regulator, CEBS, has been the first to make a positive move towards harmonization, with the FINREP/COREP framework project on prudential reporting scheduled for finalization in 2012.  

As with every area of pan-European policy-making, national interests can often override the supranational Union-wide interest; XBRL is no less affected.  However, in this instance, lack of harmonization and cohesion is ultimately detrimental to all. The weight of the administrative burden and other internal barriers still serve to keeps costs unnecessarily high and – despite the Transparency Directive — the ensuing opaqueness inevitably diminishes confidence in reported financial information.  

The main stumbling block has been identified as being the diverse accounting standards and disclosure requirements currently in existence throughout the European Union. XBRL Europe has recommended that the EU designate or create an official body to harmonize national accounting standards in line with the IFRS or to adopt a common set of accounting standards. XBRL Europe recently made a tentative proposal suggesting that EFRAG and the European National Standard Setters (NSS), in collaboration with the IASB, should take the lead on this, encouraging other European stakeholders such as CESR, CEIOPS, CEBS, the European Commission, and FEE to be involved in the effort to reach consistency throughout the EU.  

In light of this, the press release concerning the meeting held on November 12 between EFRAG and the IASB sends a positive signal. Representatives of both organizations emphasized their continued support for a single set of high quality global accounting standards, and noted the role that the EU’s adoption of IFRS has played in encouraging other jurisdictions to adopt international standards. They also highlighted the importance of broad engagement in the standard-setting process to ensure high quality standards that reflect input from all stakeholders.

At this juncture, the words of former SEC Chairman Christopher Cox resonate more than ever, when he said that “corporate reporting is not an end in itself, but a means to achieving our missions”.  Projects abound that focus on furthering the adoption of the XBRL standard; however, the adoption process, although essential, is just a step towards the final goal of having timely, accurate, and accessible interactive data that facilitates business decision-making. Long-range vision is the key, with the ultimate objective of creating and providing better information for better decisions being the guiding light. Internationally, the interactive data “genie” is out of the bottle; Europe must not be found laggard or isolated by failing to harness and coordinate its existing internal momentum.  

The Interoperable Taxonomy Architecture project (ITA) recently published The Global Filing Manual (GFM), the first set of aligned XBRL filing rules for global use. The GFM provides guidance on the preparation, filing, and validation of XBRL filings created using the IFRS, EDINET (Japan), or US GAAP taxonomies.

Maciej Piechocki kindly agreed to answer a few questions about the GFM and the ITA’s work. Maciej is a Project Manager at the IFRS Foundation, responsible for the development of the IFRS Taxonomy as well as coordinating other global IFRS and XBRL initiatives including the ITA project. He is also a member of the XBRL International Standards Board.

[The IFRS Foundation is an independent, not-for-profit private sector organization working in the public interest. Its main mission, through its standard-setting body, the IASB, is to develop a single set of high-quality, understandable, enforceable, and globally accepted international financial reporting standards — IFRSs. The opinions expressed here do not necessarily reflect the views of the IASB or the IFRS Foundation.]

1. Could you tell us about the ITA project, including its origins, participants, and objectives?

The ITA is a joint initiative between the European Commission, the Financial Services Agency of Japan, the IFRS Foundation XBRL team, and the SEC. The project was established in 2007 and it aims to converge the XBRL architectures of three taxonomies: EDINET, IFRS, and US GAAP. It is hoped that this architectural convergence will support the analysis and comparison of financial data reported in XBRL format, by enabling software vendors to develop applications for IFRS, Japan GAAP, and US GAAP reporting based on a single XBRL architecture.

The ITA project has made significant progress in aligning the architectures of the EDINET, IFRS, and US GAAP taxonomies, and has also published guidance on how to prepare, file, and check (validate) XBRL documents created using these three taxonomies. The GFM is the first significant effort to align XBRL filing rules for global use and is intended to encourage the consistent implementation of the aligned framework.

Collectively, IFRS, Japan GAAP, and US GAAP are used by 85% of worldwide market capitalization. The bodies involved in the development and implementation of these taxonomies — whether regulators or standard-setters — have the responsibility to ensure the cross-border interoperability of corporate reporting, especially while XBRL adoption around the world is growing. A single, consistent XBRL taxonomy architecture will lead to greater interoperability, which will support global software developers and lead to improved efficiency and a higher degree of acceptance in international markets.

The ITA does not aim, however, to ensure global comparability and alignment for all XBRL reporting. The focus of the ITA is reporting for financial statements where companies provide filings and not just instance documents. The fundamental use case that guides the ITA’s alignment efforts is the publication of a company’s financial statements and the consumption of those financial statements by a broad range of users and software applications.

2. To the extent possible, can you express in layman’s terms the interoperability problems among taxonomies, and how implementing the GFM solves these? What improvements will be seen primarily by XBRL technologists, and which will be apparent to users of financial statements?

Because XBRL is a robust and flexible technology, it can be — and often is — applied to a number of purposes by tailoring its architecture to meet the reporting needs of various information chains. However, this flexibility also poses risks. One drawback of such an adaptable technology is that this adaptability can lead to inconsistencies between different information chains. In the worst case, differences in XBRL frameworks can lead to incomparability.

The ITA project is working to try to mitigate this risk by aligning the architectures of the taxonomies used for IFRS, Japan GAAP, and US GAAP reporting. Put simply, the aim of the ITA project is to support information comparability by removing technical obstacles and frameworks differences that might hinder this comparability. The rules in the GFM aim to facilitate the analysis and comparison of XBRL financial reporting data by computer applications and human readers.

If you imagine trying to compare two sets of XBRL financial statements, one from a US company and one from Chinese company, you have a few hurdles to overcome:

First, there are differences in the architecture of the two taxonomies used to generate the instance documents.  If one taxonomy uses tuples while the other taxonomy uses dimensions, you will need to establish a kind of “technical translation” layer, which could be costly. However, if the two taxonomy developers follow the same, agreed-upon, architecture, there is no need to resolve differences in technical frameworks because there are none.

Second, there are differences in filing rules. Even with aligned taxonomy architectures, differences in filing rules can lead to inconsistencies in company-specific extensions and instances, and they present XBRL technologists with a challenge when trying to pool financial information in XBRL from different sources.

Any improvements from this alignment may not be immediately obvious to users of financial statements. The benefits will first be recognized by technology providers, because they will be able to develop applications based on a single XBRL architecture which avoids the development of heterogeneous platforms and software.

Only then will the benefits to others begin to emerge. Preparers of financial information, in particular those managing underlying multi-GAAP reporting requirements, will not have to deal with multiple, heterogeneous filing formats. Receivers and users of this information will be able to use fewer software solutions for cross-border analysis without the need for transferring reported information between different tools.

3. What authority does the GFM have? Will the GFM require significant changes and additions to the EDGAR Filer Manual (EFM) and other authoritative documentation?

The GFM is not really a new document as such, because it leverages existing rules contained in the EFM from the US SEC, the EDINET Corporate Extension Taxonomy Creation Guidelines from the Japan FSA, the IFRS Taxonomy Guide from the IFRS Foundation, and the Financial Reporting Instance Standards (FRIS) from XBRL International. These existing rules were reviewed, aligned, and discussed from a global filing perspective and then amalgamated and documented into the GFM.

Use of the GFM is based on the assumption that filers in a disclosure system will provide their filings by extending a standard taxonomy that is recognized in the disclosure system. The GFM must be tailored for each specific disclosure system.

From the perspective of the IFRS Foundation, the GFM is provided for information purposes only and is intended for use as guidance and not as an authoritative document. Authoritative filing rules should be provided by regulators.

Nonetheless, it is hoped that regulators will recognize the resource and interoperability benefits of aligning their filing rules on existing, publicly available rules where a significant degree of convergence has been achieved.

4. Improving data comparability is one of the three strategic goals underpinning the six initiatives recently announced by the XSB. How does the work of the ITA in general and the GFM specifically align with these efforts of the XSB?

As a member of the XSB I actively participated in the strategic discussion and the setting of the objectives for XBRL as a technology over the next few years. The outcome of this effort by the XSB effort was the discussion document Preserve. Promote. Participate.: Moving XBRL Forward. Although the ITA does not link directly to the six proposed initiatives, it is my expectation that it will make use of the outcomes of the initiatives. The ITA will also be able to contribute to a number of areas, in particular the “Enhance the Comparability” initiative. As noted, by publishing the GFM the ITA seeks to support comparability.

5. With respect to the cross-border comparability of financial statements, how would you assess the significance of differences in the underlying technology of taxonomies versus those in accounting standards? In other words, given the considerable variations that exist among international accounting standards — including various national flavors of IFRS — how much impact can improvements in taxonomy architecture have on cross-border comparability?

Obviously, the ITA cannot resolve issues related to the convergence of accounting standards and how these differences are represented in taxonomy content structures or taxonomy extensions. These differences are the responsibility of the accounting standards setters. Nevertheless, aligned architectures are a necessary prerequisite to recognizing and dealing with such differences.

For example, the latest extension to the IFRS Taxonomy, the Chinese Accounting Standards (CAS) Taxonomy, leveraged the knowledge accumulated by the ITA, and the CAS Taxonomy development team did a fantastic job of following the aligned architecture. This alignment creates a situation whereby software that can analyze XBRL filings from the EDGAR system should also be able to analyze filings created using the CAS Taxonomy. The effect should be the same for taxonomy extensions if they created using the aligned architecture.

6. You say that the ITA does not aim to ensure global comparability and alignment for all XBRL reporting. But do you believe the ITA’s work can have a broader impact beyond financial reporting?

While the efforts of the ITA project are focused on reporting for financial statements where companies provide filings, the lessons of framework comparability and global filing rules learned from the projects could be applied more broadly to general business reporting. Furthermore, preparers, regulators, software vendors, and users who have invested time and resources to understanding and implementing a globally-aligned reporting framework and set of filing rules would struggle to accommodate another architecture and another set of rules, whether for financial or non-financial reporting. Therefore, for other types of reporting, existing systems and principles — and in particular those that have achieved significant convergence — should be leveraged where possible.

7. Where do you go from here? What problems remain in interoperability? What work remains to be done?

The work of the ITA is far from finished. The ITA is currently discussing whether it is possible to develop a conformance suite for the GFM to ensure its proper implementation in software. Furthermore, there may be lessons learned from the SEC filings submitted with detailed tagging, which may require amendments or additions to the rules in the GFM. The ITA has already received a number of comments on the published rules.

Another area which the ITA will be observing with interest over the next year is the implementation of Inline XBRL (iXBRL). Currently, regulators are starting to realize the potential business benefits for iXBRL in financial reporting. The IFRS Foundation recently published a set of illustrative examples demonstrating the use of the IFRS Taxonomy in iXBRL, which is a useful addition to the XBRL technologies.

8. What can the XBRL community do to support you in your work?

Read the GFM and maybe even try to implement the aligned architecture in their own taxonomy. If it works, let the ITA know. If it doesn’t work, still let the ITA know. The ITA is not a regulatory body; it is a group aiming to achieve XBRL convergence for financial reporting for IFRS, Japan GAAP, and US GAAP. Attention, support and emulation from other jurisdictions will broaden this convergence, which can only be a good thing.

News For Tradeshows and Events Taking Place 11/15/10 to 12/26/10
Business Wire (press release)
Business Wire also handles XBRL tagging, document formatting and regulatory filing into the EDGAR and SEDAR systems. Communications professionals turn to ...

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Time to Register for the Webinar: An Innovative Approach to Data Integration ...
Canada NewsWire (press release)
15 /CNW/ - XBRL Canada is very proud to have Eric Cohen from PricewaterhouseCoopers to explain how to understand & leverage XBRL's Global Ledger Framework ...

Sebi plans unified filing system for cos, market entities
Business Standard
Besides disseminating the information on real-time basis to investors and others, the XBRL technology-based new system will also help Sebi itself as also ...

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Rivet Software Announces Crossfire™ Compliance for Mutual Funds
PR Newswire (press release)
Based on eXtensible Business Reporting Language (XBRL), Crossfire Compliance for Mutual Funds simplifies the development and submission of risk/return ...

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Sebi plans unified filing system for cos
NDTV.com
Besides disseminating the information on real-time basis to investors and others, the XBRL technology-based new system will also help Sebi itself as also ...

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Written by Joel Vicente     Posted on November 11, 2010

Joel Vicente is an XBRL Taxonomist at CoreFiling Limited and a leading participant in the establishment of a new XBRL jurisdiction in Portugal. He can be reached by email.

My “day job” is designing and building XBRL taxonomies. Despite my eight years of evangelizing through conferences and regular meetings with the major regulators and institutions in Portugal, XBRL remains little-known in my country. There was an expectation that the OTOC (Chamber of Chartered Accountants) would become the XBRL facilitator in Portugal, but now that seems to be on hold. 

In some ways, it is surprising that XBRL has been slow to take off in Portugal. Regulators and institutions have heavily used XML in their filing programs. For example, a project called IES, developed by Bank of Portugal, Ministry of Justice, Ministry of Finance and Public Administration, and Statistics Portugal, is collecting financial, business, and accounting information through a form-based application or an XML file sent from companies’ ERP systems. This is one of the most successful IT projects in Portugal. 

Many of us think that bringing XBRL to IES would be a natural next step in XBRL adoption for Portugal. As it stands, financial institutions that are unfamiliar with overseas XBRL filing regimes remain worried that XBRL has to evolve more before it can add value for analysts and investors. Some hope that Portugal will follow the lead of the UK’s HMRC and mandate Inline XBRL (iXBRL).  Inline XBRL hides machine-readable concept tags behind the legible captions, so that, for the first time, XBRL can be displayed in a browser exactly as the originator intended. This cuts out the middle-man between the reporting company and the investment analyst’s website. Inline XBRL allows the original financial report to be analyzed directly without the time, inefficiency, and errors related to cutting/pasting or transcribing company data into analysts’ spreadsheets.

As it happens in many countries, the ultimate drive for adoption may come from America’s SEC. The SEC’s requirement for XBRL financial statements is forcing the larger Portuguese companies to address XBRL; in 2011 those companies with SEC filing obligations will also need to file their financials in XBRL. This is already encouraging interest among the Big 4 in Portugal, and I am hoping that local software vendors will follow suit.

However slowly, whether from internal or external pressures, it appears that XBRL may become a reality for Portugal. 

EDGAR Online Reports Third Quarter 2010 Results
PR Newswire (press release)
Revenues from XBRL filings, which are included in total revenue, were $2.0 million for the third quarter of 2010, a 33% increase over the third quarter of ...

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