How Not to Lose the Momentum
by Gerald Trites

This year, in Canada, XBRL has been pushed to the sidelines until IFRS implementation is complete. This is unfortunate because it will put us further behind other countries than we already are. There is increasing evidence that global capital markets are embracing XBRL and that countries like Canada, because of the importance of information availability, will be at an increasing disadvantage in raising capital in those markets.

It is also unfortunate because it is based on the mistaken belief that XBRL implementation is a project that is, or almost is, as big as IFRS implementation. This is simply wrong. The two are not even in the same league. IFRS implementation for many, if not most, companies is a massive project. XBRL implementation by comparison is small. David Blazskouske, Director of the Office of Interactive Data for the Securities and Exchange Commission (SEC) spoke last week at the XBRL Canada Annual Conference. He, along with others having experience with regulatory filings, pointed out that XBRL implementations are not large projects, that they consume resources measured in weeks, unlike IFRS projects which take larger teams many, many months. Usually XBRL projects only require a small team of accountants to implement and with minimal training.

Because Canadian companies are immersed in IFRS convergence, they have their teams in place. It is interesting to note that the teams required to implement IFRS are similar in composition to those required for XBRL - accountants. We have written before of the advantages to companies of implementing IFRS and XBRL at the same time. The similarity in accounting skills required simply means economies of scale in making good use of those teams. If management does not wish to take this approach, then the next best approach is to retain the accounting team that was built for IFRS and use that team, with perhaps a bit of tweaking, to implement XBRL. This way, the momentum gained through IFRS implementation can be transported into the project to implement XBRL. It's a project that will need to be done in any event - we know that - and the core of a good XBRL implementation team is already in place. So why not use it?

The presentations for the XBRL Annual Conference are on the XBRL Canada website.