Exclusive XBRL Update
U.S. plays catch-up with an existing global information standard.
February 7, 2008
by Liv Watson
Today regulatory agencies everywhere face the challenge of collecting, processing and reporting information more efficiently, accurately and cost effectively. That’s exactly why the eXtensible Business Reporting Language (XBRL) is fast becoming the preferred global information standard for the financial and business reporting supply chain.
Many refer to XBRL as SEC Chairman Christopher Cox’s “baby,” but a quick review of the facts shows nothing can be farther from the truth. In fact, Chairman Cox is merely trying to catch up with the rest of the world.
A collaborative XBRL effort began in 1998 by a few founding members of the XBRL consortium with a vision to develop a global platform for creating and disseminating financial and business reporting information that meets the needs of today’s information age.
XBRL Around the Globe
The Chinese securities market was the first capital market in the world to mandate XBRL reporting through rules of the China Securities Regulatory Commission (CSRC), which governs the Shanghai and Shenzhen Stock Exchanges. Beginning with 50 companies that voluntarily submitted XBRL reports in 2003, the program has grown to include more than 800 public companies.
In Japan, the Minister of Financial Services, Yoshimi Watanabe, and Japan’s Financial Services Agency Commissioner, Takafumi Sato, have publicly announced an aggressive timetable for implementation of data-tagging using XBRL. Japan will mandate public companies use XBRL for their full financial statements, beginning with quarterly reporting in the second quarter of 2008.
Furthermore, the Korean Financial Supervisory Commission Chairman and Financial Supervisory Service (FSS) Governor, Kim Yong-Duk, described Korea’s movement toward mandating XBRL for regulatory reporting in a recent public statement. The FSS established a voluntary XBRL filing program in 2006. Beginning in October 2007, all publicly-held companies were required to file financial statements using XBRL on the electronic filing system of the FSS.
Canada is another country moving rapidly to mandate XBRL as its underlying open information standard. The Ontario Securities Commission Chairman, David Wilson, gave an update on the launch earlier last year of an XBRL voluntary filing program by the Canadian Securities Administrators through which issuers can voluntarily file financial statements in XBRL format.
Australian Securities and Investment Commission Chairman, Tony D'Aloisio, announced in December of 2007 that his government is funding a comprehensive initiative to adopt XBRL, which is scheduled to go live for mid-2010, with proofs-of-concept and pilot programs beginning this year.
And finally, Chairman Moshe Tery of the Israel Securities Authority stated that financial reporting by all listed Israeli public companies will be tagged using XBRL beginning this year.
These public announcements are just a few examples of XBRL’s increasingly global adoption. If your organization hasn’t jumped on the XBRL bandwagon, you should consider getting up to speed with this important information standard ASAP. It may impact you sooner than you think.
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Liv A. Watson is Vice President of Global Strategy for Norwalk, Connecticut-based EDGAR Online Inc. (NASDAQ: EDGR) — a provider of global business and financial information.