Friday, January 19, 2018

XBRL Canada Webinar - February 7, 2018, 12:00 PM – 1:00 PM (Eastern)

Canadian 20-F/40-F IFRS Filers: Time’s Almost Up to Comply with XBRL

To register, please send an email to gtrites@xbrl.ca. Further details will be provided upon registration. There is no cost to attend, but pre-registration is required. Attendance may be limited.

Background - Canadian companies listed with the SEC who use IFRS for their 20-F and 40-F filings will be required to file in XBRL starting with fiscal year ends on or after December 15, 2017 and to post the files on their investor relations web site. Many filers need to file as early as March, 2018. With only a few months left to prepare and comply, companies need to consider how they are going to go about it.

Some companies have chosen to outsource the work to one of the many providers of XBRL services. Others plan to carry out the work in house, by purchasing the necessary software and training staff to prepare the filings, potentially using additional XBRL consulting services. Those that have not yet begun to plan may find the tasks of finding resources and preparing internally to be a challenge.

XBRL isn’t just a technology issue, and management cannot outsource their responsibilities; companies will need to engage their accounting/financial reporting personnel to the job, because XBRL preparation is an accounting-oriented task. Whether you choose to outsource or plan to do the work in-house, you need to spend time learning the requirements, the taxonomy and at least some of the technical details, and how they relate to your specific reporting requirement.

This Webinar will provide concrete guidance and references to help companies comply with the requirements for FPIs. After a 40 minute presentation, we hope you will join us on Telegram to continue the discussion.



Wednesday, January 10, 2018

Time to Establish Rules for Independent Assurance on XBRL Data

A recent survey by the CFA Institute reveals that 77% of investors want some form of independent assurance on XBRL Reports.  At present there is no requirement by the regulators for assurance on XBRL Reports.  The survey is even more important with the pending adoption of inline XBRL, which is going to be required by the SEC and ESMA in the not-too -distant future.

Inline XBRL is notable because of the fact that all XBRL data is included in the same document as the human readable version of the filings. At present the human readable version has assurance reports on it. So users will tend to assume that if there is an audit opinion on the readable part of the filing, then the opinion will apply to all the filing, including the XBRL part. At present, that wouldn't be the case, as auditors do not audit the XBRL.  Much confusion will be the result.

So, it is time to establish guidelines for the audit of XBRL data. XBRL International issued a report on this topic a few years ago, and dealt with the issues in some depth. That is a good starting point. And here's another article on this topic.

 

Friday, January 05, 2018

Improved Corporate Websites for Data Analysis


Filing requirements for Foreign Private Issuers to file using the IFRS XBRL Taxonomy are effective for fiscal year ends after December 15, 2017. The deadline for most of the filers is March 15, 2018.

Along with the information to be filed with the SEC, companies are required under the SEC rules to include the XBRL information on their websites. So we should see XBRL information appearing on the websites of some 300 Canadian companies by March.

This information will appear in the Investor Relations Section of the websites, thus raising the question - what are the users of these sites going to do with that information?

It depends on the user. XBRL data cannot be read by most human beings. It was never intended for that. It’s purpose is to automate the analytical process by being platform independent and easily transportable to various data analytical tools, thus reducing the need for human intervention. The hitch is that only the more sophisticated investors have access to such tools; the rest use Excel – if they do any serious analysis at all.

Many companies already have been disclosing Excel information on their websites for several years. This has taken two general forms. Some companies have been presenting their core financial statements in excel format, which can be downloaded into Excel spreadsheets. A lot of users are sufficiently proficient with Excel that they can do a lot of analysis with that information. Some companies have also been including in the IR sections of their websites a data tool. Usually these tools include a range of data from the financial disclosures along with common analytical ratios and benchmarks. This information can also be imported into spreadsheets and used for analysis. It has the advantage that it reduces the time required for the users to go through the statements and select the data elements they want to use in their analysis.

With the availability of Excel data, the XBRL data would seem to add little for investors who do not have access to the more sophisticated analytical tools. This, despite the fact that XBRL data include a lot of metadata that could be of use. Without the appropriate tools, this information is hard to get at.

The obvious solution is to use Inline XBRL which combines HTML and XBRL into a presentation that is both human readable and machine readable. The SEC and other regulators are moving towards inline XBRL and this is a good thing. Investors will be able to read the information and with a click or two gain access to the metadata for those items. This will give them context for those items – accounting principles used, relationship to other items, etc.

Inline XBRL could also be used as a tool for those website data tools on the websites, thus enhancing the usefulness of that information.

In time, as websites evolve, all the IR information on corporate websites could be available in iXBRL form. Now there’s a thought for another day.




Wednesday, December 27, 2017

IFRS Foundation Publishes Preparers' Guide for the IFRS Taxonomy

The IFRS Foundation recently published a guide to the preparation of financial reports for filing purposes using the IFRS Taxonomy.

This is of particular interest to companies that need to comply with the SEC requirements for Foreign Private Issuers - which includes over 300 Canadian public companies. The filing deadline for most of these companies is March 31, which is rapidly approaching. The new Guide can be located at the IFRS website. XBRL Canada will be offering some workshops to help companies with their preparation. If interested, please contact info@xbrl.ca.

Monday, December 18, 2017

Expanding the use of XBRL

At present, XBRL is used by over 100 regulators in 70 countries around the world. In the UK alone, some 2.3 million companies use XBRL. Yet, there is a widespread feeling that the full potential of XBRL has not yet been met.

Comparisons often are made with bar codes, which have revolutionized the retail industry by making it possible to read information about products automatically, and facilitate the automated processing of transactions.  XBRL has the same potential to revolutionize corporate reporting.

Last year, the SEC substantially expanded the use of XBRL with its new regulations for foreign direct filers. In 2020, it will again be considerably expanded when the requirements by ESMA for making XBRL the  standard for corporate filings in Europe.

A recent report by the Financial Reporting Council of the UK expands on the opportunities presented by these developments and points the way to a new direction in corporate financial reporting over the next several years. It can be found at the FRC site.

In its press release, "The Lab recommends that a single committee be formed with representatives from regulators and Government to drive digital reporting in the UK by;

  1. Exploring the potential benefits of data reuse in the UK, and where needed, align reporting requirements;
  2. Ensuring that regulators work together to adopt ESEF, or UK alternative, to provide better quality corporate reporting data; and
  3. Engaging with companies and investors about this work.

The FRC fully supports the recommendation in the report to form a committee to help promote digital reporting in the UK and will look into how this can be taken forward.

Other recommendations in the Lab’s report include:

  1. Technology companies need to focus on producing tools and packages for non-technical users who create, distribute and consume XBRL data;
  2. Companies should develop a strategy at Board and audit committee level to discuss how  they implement XBRL; and
  3. Investors should engage with regulators, auditors/assurance providers and companies so that XBRL data is of value to the investor community.

Monday, December 04, 2017

Corporate Actions Should be Reported in XBRL


It’s time to report Corporate Actions in a standardized electronic format such as XBRL

Corporate actions includes events like dividends, stock splits, mergers, rights, options etc. Such actions are announced by companies through news releases, prospectuses, regulatory filings and more frequently lately, social media, particularly Twitter.

They are extremely time sensitive, because all investors must have access to the information at the same time. Even seemingly innocuous differences can lead to significant unfair trading advantages. Also, the traditional means of communication means that the information must be copied from one document to another, which increase the likelihood of errors being made.

The DTCC, SWIFT and XBRL US released a business case several years ago for the use of XBRL in such filings. This could reduce the timing issue significantly as well as the risk of error.

Since then an international Working Group of XBRL International has been working on this at the international level.


There has been some interest in Canada in this approach and XBRL Canada has been pursuing it. For more information see www.xbrl.ca and www.xbrl.us .