Highlights from the XBRL.US National Conference - Part 2 of 2

October 11, 2011

I had the opportunity to attend the XBRL.US National Conference at the end of September. In part 1 of this 2 part series, I shared highlights from J.W. Mike Starr, Deputy Chief Accountant, Policy and Market Monitoring, of the SEC. In this post, I'd like to point out some of shining examples shared at the conference of how XBRL has or will transform certain reporting situations other than the SEC filing requirement.

In a panel titled "Beyond the SEC—Corporate Use of XBRL to Regulators, Industry Groups, Internal Stakeholders," a three-agency XBRL program between the FDIC, Federal Reserve and an office of the Dept of Treasury was highlighted that replaced the quarterly "Call Report" with a complete XBRL-based process. According to Mark Montoya, Sr. Business Analyst, FDIC, the previous process collected bank data that was at best 60 percent clean, always requiring "calls" to the bank from the FDIC (hence the report's name) to clarify and correct the information. Now the incoming data is 90-100 percent clean. The data responsibility has been successfully pushed to the data providers, i.e. banks, allowing the regulators to spend more time doing their job, i.e. analysis. Mark joked, "Perhaps it's now time to consider renaming the report."

As usual, valuable tidbits were shared by the staff of FASB and others at the SEC on topics specific to the US-GAAP Taxonomy (including the now available for review 2012 taxonomy), and observations of the SEC related to XBRL filings to date. These subjects are covered in detail in documents and webinars available from these respective websites: www.fasb.org and xbrl.sec.gov.

A number of sessions repeatedly touched on some topics pertinent to the near future of XBRL. These issues will likely have an impact on many SEC XBRL filing registrants.

  • Consistent with the stated desires of both the SEC and the FASB, several industry groups are gathering to define and propose sets of standardized industry specific XBRL tags to replace the array of extension concepts that individual companies have been forced to create. In some cases these groups are also proposing standardized templates for certain GAAP disclosures. Aside from the obvious advantages for the respective filers, this development is seen as a boon for analysts, investors and data aggregators as it addresses their greatest complaint of excessive extensions and deficient consistency and comparability found with some of the detail tagged information in XBRL submissions to date.
  • Investors are also making loud requests to the SEC for more tagged information, including MD&A and earnings releases. The SEC hasn't made any announcement on new requirements, but is certainly listening to the requests from this constituency.
  • Progress was reported on the IFRS Taxonomy front. The FASB and IASB have made progress aligning the two taxonomy architectures in an effort to make them virtually plug compatible. There is still some effort required to create and approve a mapping between the respective tags in each. However, the SEC is projecting that they will be able to approve the IFRS taxonomy by middle of next year, apparently in time for Foreign Private Issuers to begin filing XBRL using the taxonomy after June 15th, 2012.
  • In June of this year, XBRL.US released the Corporate Actions Taxonomy, the result of an industry collaboration co-sponsored by DTCC and SWIFT. The taxonomy is already being used voluntarily in a pilot program by four financial firms including Bank of New York Mellon and JP Morgan Chase.
  • There is much anticipation in the XBRL community surrounding three legislative initiatives in various stages on Capitol Hill. The first, The Children and Family Services Innovation and Improvement Act, was actually signed into law last Friday after the conference. Like the other two, The Digital Accountability and Transparency Act (DATA Act - H.R. 2146), and the Financial Industry Transparency Act (H.R. 6038—to be reintroduced this session), these bills identify XBRL as the target technology for applicable reporting requirements.

Last but not least, the conference provided a significant focus on training to assist companies fulfill the requirements of complying with the SEC XBRL mandate. Much of the program offered accountants CPE credit, with material consistent with the training provided regularly by XBRL.US and others, including, of course, WebFilings. The content covered everything from the basics of Year 1 XBRL tagging to the more advanced topic of financial report modeling with XBRL dimensions.

All in all, the conference conveyed the message that the market is making compelling forward progress in the creation and use of XBRL data. There exists a nascent yet ever expanding array of XBRL initiatives. Adoption challenges are being met with inventiveness and diligent perseverance, and success for the companies and projects that creatively leverage the available technology appear to be the norm. The implicit recipe for success for the remaining 6000+ registrants yet to move into detailed XBRL tagging, is to invest in appropriate training and innovative technology, then eschew doubt and trepidation that their XBRL activities are for naught. The results are likely to be less costly and more valuable than imagined, and will help propel them forward in the transition to a new era of financial reporting.

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Timothy Randle

About the author

Timothy Randle is a Director of XBRL Solutions at Workiva. He has over 27 years of professional experience including over 5 years focusing on XBRL.