Who is Using XBRL?

This post was originally published on March 10, 2011. however it has grown so much since then and represents such a good answer to the basic question that it poses that it is worth re-posting. So here it is.See the original post and comments here.

Who is using XBRL? 
by Mike Willis, PricewaterhouseCoopers, LLP

'Who is using XBRL?' is a very common question. To answer the question concisely; allot of people and many of them may not even know it as they are just using data and the source and/or format is largely transparent ant thereby irrelevant to them. However, the question of 'Who is Using XBRL' may not really be the proper question (What is using XBRL?); but before we go there; here are some examples of current users:

>EDGAR-Online's IMetrix platform http://www.edgar-online.com/OnlineProducts/IMetrixProfessional.aspx enables collaboration by retail analysts on modeling concepts. XBRL not only standardizes the data but it also standardizes formulas or collections of formulas (e.g. models). Last time I asked, over 50k retail analysts were using IMetrix and the XBRL it consumes and the XBRL formulas it enables.
>Morgan Stanley's Modelware platform http://www.morganstanleyiq.ch/DE/binaer_view.asp?BinaerNr=141 does the same thing as IMetrix and is used by Morgan Stanley analysts around the world since it was launched over 4 years ago. The problems analysts have around analysis is: 1. timely, complete, accurate, relevant data and 2. the usefulness of the model or formulas to analyze the data. XBRL helps with both the data and the formulas.
>PwC's iDP platform on KCurve http://idp.pwcinternal.com does the same thing as IMetrix and Modelware and we have 65k monthly internal users.
>There are also a very broad range of data aggregators who are consuming (directly and indirectly) the freely available SEC EDGAR RSS XBRL Data feeds http://www.sec.gov/spotlight/xbrl/filings-and-feeds.shtml
>The SEC Staff are using IMetrix and other XBRL enabled tools to analyze companies and enable collaboration across analyst groups and individuals within the Commission.
>Some companies with built-in implementations who are consuming XBRL from the EDGAR RSS Feeds directly into their reporting process for peer group risk assessments and benchmarking of both numeric and narrative concepts. An example is available via this Webinar: "Automating the Last Mile: The Role of XBRL in Streamlining Financial Reporting"https://www302.livemeeting.com/cc/pwclivemeetingroom/view?id=4FQZP6 Just enter your name.
>There are banks (ABN AMRO and Rabobank) using XBRL for credit risk assessments. http://xbrlplanet.org/wp/?page_id=395
>There are institutional analysts not only using XBRL but blogging about the quality of the company reports; here is one example: a blog by an institutional analyst who suggests just that companies should pay close attention to their use of company specific extensions: http://institutionalrisk.blogspot.com/2011/02/xbrl-usability-part-2-checking.html
>Here are more generic examples of XBRL use: http://xbrl.us/research/pages/data.htm

There is more to this than 'Who is using XBRL'........ as the more relevant question may be 'What is using XBRL?'. As part of the background, it may be useful to read: "Algorithms Take Control of Wall Street" http://www.wired.com/magazine/2010/12/ff_ai_flashtrading/all/1 on the current level of automated processes found in today's trading environment. It is very interesting and thought provoking article and a few comments may bet your my attention include:
* "But many of the professional investors subscribing to Lexicon aren’t human - they’re algorithms"
 * "They just want data - the hard, actionable information"

In forming the question: 'Who is using XBRL?' is there an inherent conclusion often reached by executives asking:
* if anyone has accessed the company XBRL instance on the company website; and/or
 * analysts if they are using XBRL; and/or
 * corporate webmaster about the traffic hits on the company XBRL instance on the company website.

Should financial executives have an expectation that:
* they can detect an application automatically consuming the XBRL instances from the SEC RSS feeds; and/or
 * analysts actually know where the data comes from that populates their models; and/or
 * human beings will surf company websites looking to download XBRL instances (a machine readable format) rather than automatically accessing the XBRL instances via RSS or WebService from EDGAR.

A more appropriate question may possibly be something along the lines of: 'WHAT is using XBRL?'
* What types of applications are accessing and automatically reusing the XBRL instances? (e.g. Modeling applications)
 * How should companies expose their XBRL reports to maximize the capabilities of consuming applications? (e.g. Website posting and/or RSS Feed?)

Given the level of automation outlined in the article above; should companies be paying more attention to the quality of their XBRL reports? The institutional analyst blog provided above suggests just that: http://institutionalrisk.blogspot.com/2011/02/xbrl-usability-part-2-checking.html

In considering this topic, here are a couple of questions for companies to ask their analysts on this topic:
- Do you know how the data gets into your analytical models? If the answer is no; then they may not know if they are using XBRL or not. If the answer is yes; ask them how the data gets from company report into their analytical models?
- Have you ever compared the disclosures in your analytical models with those that in our company reports? [[This question will reveal if analysts are using data aggregators to populate their models. Most analysts models are populated by data purchased from data aggregators. Their parsing processes typically include an approximately 25% error rate for financial statement table disclosures and a much higher omission rate for note disclosures. You can prove this out by going to any of the major search sites (Google Finance, MSN, Yahoo Finance) who also use data aggregator data and compare their data to what is actually on company reports. Best to do this with an adult beverage nearby as many of the company specific disclosures are either normalized or omitted.]]
- How quickly are your models updated for our company disclosures? If the answer is anything other than immediately, then they are using data aggregator data which typically takes hours or days to reach their models. If may be useful to suggest that they subscribe to the EDGAR RSS feeds for your company reported disclosures.
 - How do you incorporate company press release information within your analytical models? It may be useful to consider using the XBRL Corporate Actions Taxonomy to structure these disclosures so that they can be accurately, completely and automatically consumed by analyst models.

Hope that these are useful.


posted by Gerald Trites @ 9:11 AM   9 comments


9 Comments:
 At 6:53 AM,  Mike Willis said...
Here is another example of an XBRL enabled application for investors, analysts, etc. http://www.9wsearch.com/
 At 12:33 PM,  Mike Willis said...
June 11, 2012 - The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Enable Issuers To Send Corporate Action Announcements in Machine Readable Format http://regulations.justia.com/regulations/fedreg/2012/06/11/2012-14032.html
 At 12:34 PM,  Mike Willis said...
June 13, 2012 BBH Goes Live with Real-Time Corporate Action Reporting Service
http://www.swift.com/news/press_releases/corporate_actions_dtcc
 At 12:35 PM,  Mike Willis said...
Here is another XBRL analytical tool: http://www.calcbench.com/
 At 12:39 PM,  Mike Willis said...
SEC Interview: Inside Information

Mike Starr of the Securities and Exchange Commission discusses the expiration of the limited liability provision, the benefits
of XBRL data to investors and regulators.

http://www.ibr-mag.com/upload/issue/2012/feb/ibr_FEB12_inside_information-p17-20.pdf
 At 5:22 PM,  Mike Willis said...
Merrill Corp White paper includes: Q&A WITH AN EXPERT: HOW INVESTORS AND ANALYSTS ARE USING XBRL. An Interview with Suzanne Morsfield, from the Center for Excellence in Accounting and Security Analysis (CEASA) at Columbia Business School

http://img.en25.com/Web/MerrillCorporation/%7B1dae731f-a549-40df-a461-50673a675162%7D_Dimensions_eNL_July2012.pdf
 At 6:31 AM,  Mike Willis said...
Here is another XBRL enabled analytical application: http://www.lyticas.com/index.html
 At 8:10 AM,  Mike Willis said...
Here is another XBRL enabled analytical viewer
http://www.xbrl4.org/regulators/index.html
 At 11:55 PM,  Mike Willis said...
BNY Mellon Goes Live with DTCC Corporate Actions Messaging Solution over the SWIFT Network

http://www.swift.com/news/press_releases/BNY_Mellon_DTCC_Corporate_Actions?lang=fr

Web service of XBRL corporate actions targeting the buy-side. Seems like useful evidence that some analysts find structured disclosures useful and the SIFMA letter to the SEC reflected actual market demand.

SEC Considers Allowing Inline XBRL

Officials of the SEC have been making refrences to allowing the use of inLine XBRL for several months now. Inline XBRL effectively combines HTML and XBRL to create documents that look more like "regular" documents, easily readable by humans, while retaining the XBRL tags that can be used for consuming the data. It effectively allows the filers to file only one document rather than the two at present - the XBRL instance document and the readable document. See this article for more.

XBRL in the Canadian Federal Government Gets a Boost


The House of Commons Standing Committee on Finance tabled its report in the House of Commons. Here is a link to the report.

Recommendation number 26 states "That the federal government continue to implement the recommendations of the Red Tape Reduction Commission, such as the “One-for-One” Rule, to reduce irritants to business that impede growth, competitiveness and innovation. This could include exploring the possibility of standardizing business reporting language, known as XBRL, to reduce compliance costs for taxpayers and enhance federal data collection."

This is a significant milestone to the ongoing efforts of CICA and XBRL Canada to encourage XBRL adoption in the federal government.

The State of XBRL in Canada

Check out this guest blog entry in the Q4 Blog.