In my last blog I actually mentioned that XBRL can be cool. I wrote that while having my Sunday morning cappuccino, brought from an absolutely charming village in Hampshire called Hartney Wintney.
Also to be truly powerful XBRL needs to have a global market. Now the next few paragraphs are going to sound a bit heavy. But we are now into some serious territory.
On this international stage, enters the regulators, who comes as an unlikely market maker…
In the United States, the Securities and Exchange Commission, has mandated that SEC listed companies must file quarterly and yearly statements in XBRL. This information is made public by the SEC for the purposes of transparency. One of the effects being that private and institutional investors may analyze the information being released.
This has caused a growth in an IT sectorx offering services to companies who need to submit accounts in XBRL.
In the United Kingdom, HMRC (Her Majesty’s Revenue & Customs) have required all UK companies to submit their Corporation Tax returns for tax year ending in April 2010 by April 2011 using iXBRL, a simplified variant of XBRL.
This is a major investment for HMRC with the expected return on investment being massive departmental savings arising from reduction in manual processing of CT returns, increased efficiency in identifying risk, improving quality of submitted turns and above all reducing the tax gap between expected and actual revenue.
So in terms of the UK how has this affected the marketplace? It is now mandatory for all UK companies to deliver their returns in iXBRL.
As a consequence vendors of accounting software now have to handle iXBRL. Accounting firms great and small have to ensure they can support iXBRL filing of Corporation Tax returns on behalf of their clients, UK companies.
So what about the rest of the world?
The IFRS has focused on a global outreach for XBRL; in fact XBRL has also been adopted by Regulatory Bodies around the world, these include:
- European Banking Authority
- European Insurance Authority
- China Securities Regulatory Commission (CSRC)
- Ministry of Corporate Affairs (MCA) – India
A vast data ocean of financial information in XBRL presents us with some incredible opportunities. This is speculation on my part, but supposing if performance of financial instruments start getting reported in XBRL as well as financial statements? Just with financial statements we have huge volumes of data accumulating. Now with other financial events being reported, our huge volume starts becoming big data.
That would represent the next big challenge (and the opportunity). How many XBRL companies are really ready to deal with financial big data?
Now trying not to sound like an annoying smarty pants, know-it-all!
Because we laugh in the face of danger! Bring it on Big Data Moby Dick! Captain A-hab is awaiting. Actually no, at Apurba Technologies. We don’t go around spearing whales.
More like we are the kind of folks that would rescue them in our very own Klingon Bird of Prey and release them in San Francisco Bay.
Now I know I am sounding ridiculous. However I do believe we can’t meet new challenges with relying on the solutions of yesteryear. The global use of XBRL and the inter-connectivity of information systems means that we have to take an imaginative, off the wall approach.
Thanks again for reading my ramblings…