by Bill Carlino
New York — While XBRL continues to wend its way through the European Union and other parts of the world, the Internet business reporting language has carved out more modest progress on domestic fronts.
As an example of its growing presence overseas, last month, the European Commission earmarked 1 million euros (about $1.23 million) to the “XBRL in Europe Consortium,” a newly formed organization and affiliate of the more established XBRL International, dedicated to increasing awareness of XBRL in the European Union and assisting member countries in starting local jurisdictions.
“What’s happened is that people have understood the regulatory aspect of this, and once the word of mouth spread, it became fairly easy to talk to people in places such as China about XBRL,” said Mike Willis, a partner at PricewaterhouseCoopers and founding chairman of the XBRL International consortium. “As a result, it’s continued to grow in terms of country involvement. Right now, the global acceptance of XBRL is beyond that of the U.S.”
The XBRL in Europe Consortium, which is intended to be a two-year project, includes: Chato d’O, a Belgium-based consulting firm; Computer Sciences Corp., a global information technology services company headquartered in Belgium; the International Accounting Standards Committee Foundation; NIVRA, the Royal Dutch Accountants Association; PwC; Semansys Technologies BV, a Netherlands-based vendor of financial reporting software; and XBRL UK.
Currently, 14 countries have what’s known as “jurisdictional involvement” with XBRL, including the U.S., Canada, the U.K., Australia, Germany, Japan and Spain, while several others have obtained provisional jurisdiction, including Korea and Sweden. In total, the movement has roughly 250 members.
“[XBRL] is gaining traction in different parts of the world, particularly those geographic regions that are under pressure to modernize their reporting systems,” said Louis Matherne, president of XBRL international and director of XBRL for the American Institute of CPAs. “And because of that, it’s moving quicker than in the U.S.”
Now five years old, Extensible Business Reporting Language is the financial reporting derivation of Extensible Mark-up Language, or XML, a framework that establishes individual “tags” for elements in structured documents, allowing specific elements to be immediately accessed and aggregated.
“We thought we’d be done with this project in 12 months,” said Matherne. “It turned out to be bigger than any of us at that time had imagined.”
In May, XBRL International held its conference in Auckland, New Zealand. Themed “Exchanging Business Information,” it drew some 200-plus attendees and highlighted XBRL’s use within stock exchanges and small and midsized businesses, as well as public issuers.
Matherne, who attended the confab, said that the sessions included a presentation by the New Zealand Stock Exchange. “We’re probably getting the most traction in the regulatory and exchange market,” Matherne said.
To date, over 40 regulators, exchanges and other organizations in nine countries have adopted XBRL for their reporting purposes.
In the U.K., Willis said that the Financial Services Authority will have an XBRL requirement for 2005 filings, while the Inland Revenue (that country’s tax authority) has a program that will begin accepting returns in an XBRL format by the onset of the next tax year.
“Any regulator has the same problem a CEO has,” Willis said. “And that’s analyzing a lot of information from different places. The seminal event for XBRL and the latency of the paper-based model was probably 9/11. On 9/12, the latency from the basic flow of information from companies to regulators to decision makers was unacceptable.”
The XBRL U.S. membership currently stands at about 50 — representing a variety of accounting, software, banking and media disciplines.
In June 2003, the Federal Deposit Insurance Corp. began work on a $39 million call reporting modernization system that used XBRL. And the Federal Financial Institutions Examination Council, an oversight body that prescribes principles, standards and report forms for financial institutions, is requiring that U.S. banks submit quarterly reports tagged with XBRL “metadata” taxonomies.
Among vendors, companies such as CaseWare International, Fujitsu Ltd., Hyperion, and Creative Solutions, a Thomson business, have adopted XBRL to varying degrees. Meanwhile, Microsoft provides XBRL support for Microsoft Business Solutions and reportedly plans to extend it to Office.
“For the whole concept to be successful, we need to have participation from all stakeholders in the business reporting model, and obviously software publishers have an important role,” said Matherne.
However, Matherne projected that XBRL in the U.S. will heat up over the next 12 months, as the group builds out its taxonomies in verticals such as commercial insurance, oil and gas, broker/dealers and, further down the line, airlines and health care.
“There’s going to be a lot happening,” Matherne said. “Sarbanes-Oxley helped, in that it brought more attention to the need for transparency for financial information.”
