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.