IASB Supports XBRL and Calls for Improvements

This article was originally posted on VRL-Financial-News.com

International Accounting Standard Board (IASB) chairman Hans Hoogervorst called XBRL a “remarkable success” and said it has the potential to improve the effectiveness of financial reporting.

Speaking at the 2012 IFRS Taxonomy Annual Convention in London, Hoogervorst said XBLR has the potential to supplement the “one-size-fits all approach of today’s financial statements, while certain aspects of financial reporting are stuck in the offline pre-PC world”.

In the future, XBLR will allow users to extract the information they need and to eliminate the re-keying of financial information into proprietary systems, thus reducing cost and error while increasing the speed and efficiency of analysis.

“XBRL allows users of financial statements to consume financial information in whatever language they are familiar with,” the IASB chairman said.

However, Hoogervorst stressed the need to understand the scope and limits of XBLR, as the standards should not define or impede the Board’s standard-setting activity.

“In other words, the XBRL tail should not wag the IASB dog. XBRL should be a normal output from our IFRS standard-setting work,” he noted.

Hoogervorst also said there are still challenges ahead and has set three main priorities:

• ensure IFRS taxonomy is of the highest quality;
• ensure XBLR is deeply integrated into the standard-setting activity;
• work closely with preparers, regulators and the investor community to unlock the potential of XBLR and understand where there’s room for improvement.

XBRL and SEC Requirements

In 2009, the Securities and Exchange Commission (SEC) published its final rules requiring XBRL tagging of certain disclosure information for operating companies, mutual funds and credit rating agencies. Targeted corporations were broken into three groups, based on their public float, for this phase-in approach.

 

Year 1

• Domestic and foreign companies that are large accelerated filers under Exchange Act Rule 12b-2, use U.S. Generally Accepted Accounting Principles (U.S. GAAP) and have non-affiliate held equity securities valued at more than $5 billion (about 500 companies).
• Requirements begin for the first quarterly report on Form 10-Q or annual report on Form 20-F or 40-F, as applicable, that contains financial statements for a period ending on or after June 15, 2009.

 

Year 2

• All other domestic and foreign companies that are large accelerated filers and use U.S. GAAP.
• Requirements begin for the first quarterly report on Form 10-Q or annual report on Form 20-F or 40-F, as applicable, that contains financial statements for a period ending on or after June 15, 2010.

 

Year 3

• All other domestic and foreign companies that use U.S. GAAP and foreign companies that use International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS/IASB).
• Requirements begin for the first quarterly report on Form 10-Q or annual report on Form 20-F or 40-F, as applicable, that contains financial statements for a period ending on or after June 15, 2011.

 

According to the SEC mandate, companies are required to tag their face financial statements in the first year of XBRL reporting. A company also is required to tag its financial statement footnotes and financial statement schedules in its first year, but only as blocks of text.

 

After the first year of such tagging, a company also is required to tag the detailed quantitative disclosures within the footnotes and schedules (all monetary values, percentages and numbers).

 

New public companies are subject to the XBRL requirements for the first quarterly report on Form 10-Q or annual report on Form 20-F or 40-F, as applicable, due after they become public companies.

 

The final SEC rules for corporations and XBRL filings can be found here.

 

Rules governing mutual funds can be found here.

 

Special instructions to help companies in Year 3 can be found here.

The Benefits of XBRL

Good Friday afternoon to you! : )

What's a better way to start off the holiday weekend than with a little XBRL?

As usual, we were reading up on XBRL news and information this week and came across a really great article on the benefits of XBRL. Now of course we have our own reasons on how XBRL can greatly benefit business, but these are worth noting so we wanted to share.

Benefits achievable by electronic standardization of reporting:
Source: cdsb.net

• Accuracy, quality, and data integrity: XBRL will help companies reduce the number of errors in the information they report.
• Interoperability of Systems: Existing GHG accounting software does not easily exchange data. By standardizing concepts and reports (outputs), companies can refer to a common standard to transform their data so that it easily transferable between systems.
• Timeliness: Increasing pressure from clients, governments and investors will require more frequent reporting of inventory data in the future. XBRL allows companies to report inventory data with a frequency they can specify and make data available more rapidly because the time spent rekeying and verifying is decreased.
• Transparency and Comparability: XBRL is a global standard based on XML that allows for the provision of meaning by defining and making available to all the data and metadata definitions.
• Value-Add:  XBRL allows users to select specific data in order to customize reports and provide tailored information to end-users such as investors, auditors and analysts.
• Decrease Costs:  Your stakeholders use CDP’s climate change data.  The lack of a common standard considerably increases the cost of transforming and analyzing data.  E.g. error and consistency checking.  Furthermore, value chain reporting of GHG data will become increasingly important to you. Helping to drive adoption of the CCRF XBRL Taxonomy for climate change reporting is a long term vision and will streamline supply chain reporting.
• Facilitate relationships:  XBRL provides a bridge between the “subject matter” experts and the “technology experts” that is useful to accelerate the adoption of standards or heir updates.  It also makes it easier and more understandable for your stakeholders such as investors, auditors, regulators, analysts, and even reports to quickly find relevant information.

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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.