Accounting and technology experts are meeting in Vancouver this week to discuss their progress in steering companies towards a standard XML-based way of reporting financial information.
Highlights from the Global XBRL Conference on Wednesday included an announcement from the U.S. Securities and Exchange Commission that it is releasing a new taxonomy for Extensible Business Reporting Language (XBRL). The taxonomy is designed to bring some standardization and consistency to the way companies would use XBRL to file public financial disclosures or other information to stock exchanges or regulators. XBRL came out of an industry consortium more than five years ago and uses metatags to more effectively share, analyze and publish information.
XBRL is already gaining momentum in the United States, in part because of a mandate from the Federal Deposit Insurance Corp. (FDIC) that all banks submit call reports with it.
A few years ago the Toronto Stock Exchange set the stage for Canadian adoption by publishing its year-end results using the standard. More than 40 Canadian organizations, including Royal Bank, Public Works and Government Services Canada and PricewaterhouseCoopers have joined XBRL Canada.
Canadian companies already have a taxonomy they can use which was developed in partnership with XBRL Canada and XBRL International. Notes to the Canadian General Accepted Accounting Principles (GAAP) and taxonomies were released this week. Bill Swirsky, past chair of XBRL Canada and an attendee at this week’s conference, said the U.S. taxonomy could be particularly useful for the 200 largest companies in the country that inter-list on both the Toronto and New York Stock Exchanges.
A more significant shift may come in the next three to four years as Canadian capital markets move from GAAP to International Financial Reporting Standards (IFRS), said Swirsky.
“If companies are going to look at going live with IFRS reporting in 2011, they virtually have to start working in 2008/2009 to have comparative figures ready to go,” he said, adding that XBRL could streamline this transition.
XBRL is already gaining momentum in the United States, in part because of a mandate from the Federal Deposit Insurance Corp. (FDIC) that all banks submit call reports with it. In a conference call earlier this year, FDIC CIO Mike Bartell said the effect on workflow and quality of information has been huge.
“Data can be used on day of receipt,” he said. “It’s arriving clean.”
On a more international level, J