This Week in XBRL: Eyes on the Future

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

On our Twitter and LinkedIn profiles, we put out a question: “What do you see in store for the future of XBRL?”

Admittedly, tagging systems for financial reporting may not be the most obvious subject for abstract thought, but over the past decade, we have already seen XBRL being adopted for any number of unusual uses. In theory, XBRL tags could be used for any software-based financial purpose:

Now, MarketBrief, a new start-up based in Mountain View, California, promises to publish over 1000 stories per day thanks to its software journalists.

It's easier than it sounds. SEC filings are published in a format called XBRL, or eXtensible Business Reporting Language, much like websites are published in HTML. MarketBrief's software generates articles by extracting key facts from the XBRL data and slotting them into pre-defined sentences.

This NewScientist.com article points out that the only real downside to this reporting software is the lack of humanity. “The result is readable, if dull,” says reporter Jacob Aron, “but MarketBrief will beat a human journalist to the punch every time, as the company claims it takes just three to 20 seconds for it to break a story.” If MarketBrief can iron out the dryness of their ‘software journalists,’ the site could easily become a go-to location for financial news, and that reality isn’t far off.

We cannot say whether or not MarketBrief is making the effort to remove the computer-generated tone of their reporting, but other software clearly is. AI “chatterbots,” like Cleverbot and Jabberwacky use complex algorithms to read and respond to live discussion from human participants. As time passes, the artificial intelligence gets smarter, learning more and more of the eccentricities that differentiate humans from computers. In fact, Cleverbot recently scored a 59.3% success rate on the Turing Test, a method of determining whether or not a speaker is human or software. That means that the majority of people having a chat session with Cleverbot could not tell that they were speaking with a computer.

Will Fortune Magazine replace their reporters with web-crawling software? Maybe, eventually, but we would suggest still picking up the phone if they call.

Do you have thoughts on the future of XBRL in the upcoming decades, share them below.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.

This Week in XBRL: XBRL and International Finance

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

XBRL has become an industry standard in the states, but until now, its reception worldwide has been mixed. These are a few of the global issues making headlines in the world of XBRL today:

The deadline to meet the newest XBRL taxonomy regulations in India is swiftly approaching, and many experts are still concerned about the unaddressed problems and hiccups in the system. Analyst Sangeeta Singh provides some insight:

There is no updated validation tool that will test the XBRL software developed by various vendors, the project lacks extensions to the glossary of financial terms—known as taxonomy—and analysts and investors are not allowed to download the data in the XBRL format, they add. By 30 November, around 30,000 companies with a paid-up capital of Rs.5 crore [around one million US dollars] and more, or a turnover of at least Rs.100 crore [around 20 million USD], have to file their profit and loss account and balance sheet for the year ended 31 March in XBRL. The ministry [of corporate affairs] missed a deadline of 30 September of implementing the project because both the taxonomy and the validation tool had to be revised.

The MCA hopes to improve financial reporting by adopting the United States XBRL system, but experts in India feel that they are missing the point. Vinod Kashyap, director of NextGen Knowledge Solutions Pvt. Ltd., says “MCA’s attempt of putting up statements filed by companies in PDF form and not XBRL form for public viewing will defeat the purpose of adopting XBRL and will disallow analysis and comparison”

Overall, the experts all agree that there will be some persistent issues with India’s system, but the primary concern now is for the MCA to get the project moving in time for that country’s financial industry to meet the already-set deadlines.

Meanwhile, in Japan, the system is having a much warmer reception. Japan’s financial markets are making a special effort to maintain an internationally-friendly XBRL system.

The country's main corporate companies still utilize pen-and-paper methods for most of their reporting and analysis, according to analyst Makoto Shibata. “[Japan] will develop a taxonomy or standard process…They will experiment with how they can handle and proceed with the process.” Since its introduction to Japan in 2008, XBRL tagging was limited to a few specific needs, but is now being brought into use in accounting, pricing data, and corporate sustainability reports.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.

This Week in XBRL: For and Against XBRL Adoption

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

Though it has already become an industry standard, there is still some debate surrounding the value of XBRL reporting. This week, two headlining articles made their way around the web, providing alternate views of the reporting system.

Federal Contractors Opposed to XBRL

The House Oversight and Government Reform Committee, chaired by Representative Darrell Issa, has come to the conclusion that federal agencies are still relying on outdated, manual financial reporting, and it is costing them time and money. Among these agencies are the Department of Veteran Affairs, and Homeland Security. Both departments use legacy financial assistance systems and manual processes. Describing the current reporting structure, FierceGovernmentIT.com had this to say, “Manual process are ‘inherently problematic’ since they're slow, inefficient, expensive, and conducive to human error.”

However, federal contractors have been opposed to the adoption of XBRL reporting, despite these obvious inefficiencies. Issa’s committee is supporting legislation that would require those contractors to switch to XBRL reporting.

Issa is sponsor of the Digital Accountability and Transparency Act, or DATA Act, a bill that would among other things legislatively institutionalize a spending monitoring board modeled after the Recovery Board. It would also create a single, government-wide reporting system, with all financial reporting to be done in eXtensible Business Reporting Language, or XBRL, an XML-based metadata schema. The XBRL requirement has proved unpopular particularly among federal contractors, who would have to also adopt it. Many say XBRL is cumbersome and would be a financial burden (FierceGovernmentIT.com).

XBRL to ‘Repair the Last Mile.’

Outside of government conflicts, XBRL has been widely adopted and enjoyed by corporate entities. The reporting method provides a much-needed way to remove the strain, the time, and the financial burden of manual closing procedures.

Things started to gel about three years ago when the SEC began requiring the largest corporations to use XBRL when filing information. Mark Lelyo, Executive Director of Corporate Financial Systems at Time Warner Inc., had this to say about the arrival of the XBRL mandate: "We had an added incentive to find a solution" to the slow and tedious financial reporting process…

…Time Warner claims internal consumers of its financial statements have since gained increased confidence in the accuracy and quality of its financial reporting. Process automation has helped ensure the consistency and integrity of numbers and associated text on a repeatable basis.

Financial institutions and corporate businesses nationwide are extolling the virtues and benefits of XBRL, but federal contractors still insist that the system is too big of a burden to bear. It’s clear that opinions will continue to waver on the issue of this tagging system, but for those that are ready to adopt the future of financial reporting, Merrill Corporation is here.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.

This Week in XBRL: Bryant University Hosts 11th Annual XBRL Conference

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

Today, XBRL is accepted as the standard for everything from finance reporting to daily news, but has it always been that way?

At the end of this month, Bryant University, in Rhode Island, will be hosting the 11^th annual XBRL Conference. The topic this year is, “Your Clients Begin XBRL Filings Soon - Are YOU Ready?” As one might expect, the conference theme implies the wide-spread use of XBRL, as well as the fact that there have been 10 previous annual conferences. We couldn’t help but wonder what the theme was in the past.

With a little digging, we got our answers.

During Bryant University's first XBRL conference in 2001, the event was organized by Professor Saaed Roohani, who has been said to be at the heart of XBRL since its creation:

One of Bryant’s own, Accounting Professor Saaed Roohani, has been at the forefront of the XBRL movement since the idea was conceived in 1998. At the time, he was one of only a handful of U.S. academicians who researched and taught the then-new standardized reporting language. Roohani recognized its importance in uniting world markets.

The theme that year? The XBRL Educational Resource Center, a website and academic program launched by Roohani.

The theme, and certainly the aesthetic style, of the conference has changed consistently over the years, but the effort to further the spread and education of XBRL has never wavered. We are impressed with Bryant University’s early adoption of XBRL tagging, and are further impressed by their commitment to continue it.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.

This Week in XBRL: IFRS Announces Interim Releases

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

As part of an update to the XBRL infrastructure of the 2011 IFRS Taxonomy, the IFRS has released a few interim releases in order to keep up to date with recent accounting standard changes.

These interim releases, instead of waiting for an annual Taxonomy update, will allow companies to gain access to new reporting tags. The IFRS hopes that this will prevent those companies from using out-of-date tags. The released tags affect:

Presentation of Items of Other Comprehensive Income (amendments to IAS 1) and IAS 19 Employee Benefits, both issued by the International Accounting Standards Board in June. Only a few weeks prior, the IFRS Foundation also published an interim release to provides tags related to IFRS 13 Fair Value Measurement and IFRS 12 Disclosure of Interests in Other Entities, issued by IASB in May.

These interim releases allow for electronic reporting, another initiative which may lead to a decrease in erroneous tag usage. The IFRS plans to include these interim changes in the 2012 IFRS Taxonomy, due in the first quarter of next year.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.