Canada Brings up the Rear
By Gerald Trites

The International XBRL Conference in Paris ended on June 25 after three days of intensive discussion and informative sessions from governments, regulators, consultants, aggregators, publishers, academics and others. Each year, the XII conferences get richer with content and show amazing progress in the adoption of XBRL around the world.

A Canadian attending the conference is prompted to ask one simple question – Why is Canada so far behind the rest of the world? Don’t we realize that equity markets depend on current data and that much of the rest of the world is now or soon will be able to produce that data in a form that can be read and analyzed by any computer systems; that it can be analyzed with unprecedented speed and depth? That economies have globalized and that the free flow of information is of paramount importance? That we soon will not be able to compete?

We Canadians are stuck in the last vestiges of the Gutenburg era, while the rest of the world is speeding ahead with state-of-the-art technologies. Blame it on governments that lack foresight, or on regulators that feel they need to follow the US – at a safe distance - or on our branch plant mentality. Whatever the reasons, we are badly behind and we will pay a price for that.

At the conference, speakers from the US, UK, Netherlands, Australia, Spain, China, Japan, Belgium and many others spoke of their programs that have, or are about to, involve the implementation of XBRL. David Blaszkowsky, Director of the SEC's Office of Interactive Disclosure in the US, spoke about their new filing requirements.

Ignacio Boixo, coordinator of the XBRL Network of the Committee of European Banking Supervisors, spoke about the XBRL implementations of both the COREP (Basel II) and FINREP (IFRS) reporting frameworks which are now used in more than half of the member countries of the European Community.

Speakers from the Netherlands talked about the development of the taxonomy for the Netherlands Taxonomy Project (NTP), which involves a comprehensive adoption of XBRL across the government, so all filers can use XBRL for all their filings with government authorities. The savings from this approach, often referred to as Standard Business Reporting (SBR) will be many millions of Euros.

Paul Madden, the Program Director for Standard Business Reporting (SBR) in Australia, discussed their program, which is broadly similar to the NTP in the Netherlands and involves 12 government agencies, and the development of a single taxonomy for Australian businesses to report to government.

Andy Greener, an Enterprise Architect of Her Majesty’s Revenue & Customs in the UK, gave a compelling presentation on their program to require all UK companies to file their tax returns in XBRL by next year. Companies House in the UK has already received over 100,000 filings in XBRL.

A speaker from the Federal Public Service, Finance in Belgium reported on a corporate tax return taxonomy development project for that country, which will lead to XBRL tax filings in Belgium. Two members of the Reserve Bank of India (RBI) told of the implementation of XBRL-based filings by banks to the Reserve Bank.

Mr. Koji Yoshida, head for Disclosure Planning in the Tokyo Stock Exchange Inc., reported on their implementation of XBRL.

There were many others. XBRL is rapidly becoming the standard format for the reporting of financial and business information in stock exchanges, banks, tax departments and other government departments generally around the world.

We need to get moving.

Bowne has developed a new product to automate the conversion between 2008 and 2009 taxonomies, called Bowne XChanger. This software tool will automatically make technical updates in the XBRL files and provide detailed results as to what previously-used US GAAP and extension taxonomy elements are found in the new 2009 taxonomies. They are using this tool internally to transition their full-service clients, but it is also available on their website for self-tagging issuers. www.bowne.com/xbrl

XBRL in Paris

The XBRL International Conference is being held in Paris from June 23 to 25. This year, the conference has added an academic track, in which a number of research papers are being presented. The program, which can be found on the XBRL.ORG website, has a wide variety of topics and speakers, covering such areas as taxonomy development, reporting burden reduction, banking supervision, and the impact of the semantic web. The latter, the semantic web is the wave of the future, and there is work under way to incorporate XBRL in it. There has been enough experience with the real world application of XBRL by now to be able to offer up a number of case studies and empirical research projects that will strengthen XBRL for the future. It's worth tracking the conference next week. It will be webcast live for the first time from the XBRL.ORG site.

Time for Paris!

The 2009 XBRL International Conference is being held in Paris starting on June 22. The theme is on reducing the burden of compliance with legislation and regulations, which is an important topic at any time, but especially during these times of restraint. What you learn at the conference could save you the cost.

Details at the xbrl.org site.

Is your Investor Relations Web Site Ready for XBRL?

by Diane Mueller

The U.S. SEC recently issued new rules requiring companies to provide financial statement information on their corporate web sites in an interactive data format using the eXtensible Business Reporting Language (XBRL). This is good news because XBRL has the potential to increase the speed, accuracy and usability of financial disclosures for investors while also ultimately reducing corporate costs.

Companies are now required to provide their financial statements on their corporate web sites in interactive data format using XBRL no later than the calendar day that they submit their financial statements to the SEC (1). In this format, financial statement information can be viewed interactively from your investor relations web sites, downloaded directly into spreadsheets, analyzed in a variety of ways using commercial off-the-shelf software and used within investment models in other software formats.

The U.S. SEC rules will apply to public companies and foreign private issuers that prepare their financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and foreign private issuers that prepare their financial statements using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

This interactive data format must be provided as an exhibit to all periodic and current reports and registration statements, as well as to transition reports for a change in fiscal year. The new rules are intended not only to make financial information easier for investors to analyze, but also to assist in automating regulatory filings and business information processing.

The XBRL Challenge

Until now, individual investors could obtain only high-level key financial figures for large companies with stock price history from sites like Yahoo! Finance and MSN Money. Institutional investors and research firms with deeper pockets could obtain real-time financial data feeds from pay-per-view data aggregators like EDGAR Online. However, these data sources are highly normalized, disconnected from the source and lack any semantic annotations. In greater detail, these data sources are fed by automated screen-scraper aggregation applications culling information from the HTML or ASCII filings and then are mapped to the data aggregators’ various relational databases. This extraction process is expensive and error-prone — especially when data has to be remapped to data aggregators’ relational databases prior to distribution to their various subscription-based data feeds. Also lost in this aggregation process are essential features of financial information: access to the reporting entities’ ‘as-reported’ stories, trust in the authenticity of the content, and granular detail. Data aggregated in this manner is not able to reflect the reporting entities’ as-reported financials.

The SEC ruling introduces a phased mandate for filing in XBRL starting with the largest companies in June 2009, and the ruling will extend to companies of all sizes over the next three years. As a result, we can expect to see very large amounts of financial data becoming available in a machine interpretable format (XBRL). The challenge is to exploit this data to provide new kinds of services to investors.

With XBRL, financial data has become a lot more interactive, with an emphasis on helping users make sense of the data. What distinguishes XBRL is the precise semantics attached to every reported fact. This makes it easy to pull out specific figures and concepts, and facilitates accurate comparison. XBRL metadata also enables both drill-down to granular detail and linking to reference sources like definitions, rulings and accounting standards documentation sets.

How to Take Advantage of this Opportunity

Now is the time to get your IR web site compliant with the U.S. SEC mandate.

First, you need to ensure that your IR web site is ready and able to accept and post XBRL filings in an easily discoverable and permanently linkable manner. It is important that you clearly identify the data that you control on your IR web site. By assigning URIs (hyperlinks) to resources (actual XBRL-tagged filings), you enable other people to talk about and even share ‘as reported’ views of your filings using social networking applications.

URLs like this are not useful for XBRL filings:

http://www.mycompany.com/IR/
b518b359b4abd4df0d6f7f129770b078/compdetails

A better approach is to use a URI scheme like this:

http://www.mycompany.com/IR/
{CompanyId}/{filingtype}/{year}/{number}

Using a numerical-based canonical URI provides an explicit hierarchical scheme that is much easier for search engines and other web browsing tools to discover. This approach represents the data in a way that people can use easily, and it will enable you to expose the data to a wider audience in a repeatable fashion.

Secondly, you should also consider delivering a rendered view of your XBRL-tagged SEC filings alongside the raw XBRL filings. Simply posting the raw XBRL files may not be enough. At this early stage in adoption, there are only a few desktop applications available to consume the XBRL content, and you will want to make sure that your site’s visitors can take advantage of the interactive data and access the rich semantic metadata-enhanced XBRL-tagged financial reports on demand.

Finally, although the SEC ruling only requires that XBRL data be made available for at least 12 months on an issuer’s web site (2), it would be wise to continue to host the data on a longer, more permanent basis. Links that disappear after 12 months can be very frustrating for users of that content and can create broken links in search engines. Also, keeping the data around long-term allows you to continue to control the data and allow for your site's visitors to perform a historical analysis of your financials without having to search for each filing individually on the U.S. SEC EDGAR site or subscribe to expensive data feeds.

In addition, by hosting your XBRL financial content on your Investor Relations web site, the data becomes infinitely more discoverable by search engines. The U.S. SEC blocks all search engines, including Google, MSN, Yahoo, and so on, from indexing any files at the SEC.gov web site. This practice impedes individual investors from easily linking to and aggregating the content on their own.

This new approach will enable your content to remain connected to the original source — improving ‘trust’ in the provenance of the source of the information and enabling a previously unattainable level of information granularity.

If you take these few important steps, you will vastly improve the findability of your financial information, enable your site’s visitors to view your filings in real-time, share them with colleagues across social networks, link to the filings directly on your site and eliminate the barriers to access by your key stakeholders.

[1] The day the registration statement or report is submitted electronically to the Commission may not be the business day on which it was deemed officially filed. For example, a filing submitted after 5:30 p.m. generally is not deemed officially filed until the following business day. Under the new rules, web posting will be required at any time on the same calendar day that the related registration statement or report is deemed officially filed or required to be filed, whichever is earlier.

[2] The inital proposing release did not specify that the XBRL data would be required to be posted for at least 12 months on an issuer’s web site, but commenters requested clarification and the SEC did make a clarifying amendment to the ruling.


Diane Mueller has been actively involved in the development efforts of the XBRL standard for the past nine years. She is the Canadian representative to the XBRL International Steering Committee, serves as Vice Chair of that body, and chairs the XBRL Working Groups on Rendering and Software Interoperability. She currently serves as vice president of XBRL development at JustSystems, the largest independent software vendor in Japan and a worldwide leader in XML and information management technologies. Learn more about JustSystems at http://www.justsystems.com, and contact Diane at diane@justsystems.com.