The US Securities and Exchange Commission (SEC) is proposing to ‘green light’ in-line XBRL (iXBRL) for US listed company filings. iXBRL combines human readable HTML and machine readable XBRL in a single document. Structuring financial information can also assist in automating regulatory filings and business information processing. By tagging the numeric and narrative-based disclosure elements of financial statements and risk/return summaries in XBRL, disclosure items are standardized and can be immediately processed by software for analysis. iXBRL signals the end of ‘dual filing’ whereby both an HTML version and an XBRL version were submitted that could lead to inconsistencies between the two filings. The SEC has released a video explaining its new ‘viewer’ that is said to support in-depth analysis of individual filings. The SEC also reports a new xBRL-JSON draft specification which will provide a ‘very simple way to make XBRL data easier to consume.’
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XBRL received a strong endorsement from the CFA Institute last year with the publication of a 60-page report, ‘Data and technology, transforming the financial information landscape.’ Authors Mohini Singh and Sandra Peters argue that the same technology that is transforming regulatory filing can be further harnessed to ‘reform the financial reporting process end to end.’ The report examines the effects of data and technology on the finance function, on data capture, management, analysis, and use in financial reports and audit.
Companies need to structure data early in the reporting process and to see structured data as a form of communication, not just a delivery mechanism. Today, companies view structured reporting as a compliance exercise and cost center. Data is not structured at source, early in the financial reporting process rather as an additional step needed to fulfill regulatory filing needs. Regulators need to require structured reporting beyond financial statements and allow investors a deeper look into annual reports (see above!).
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