Monday, December 18, 2017

Rapid Expansion in the Use of XBRL

At present, XBRL is used by over 100 regulators in 70 countries around the world. In the UK alone, some 2.3 million companies use XBRL. Yet, there is a widespread feeling that the full potential of XBRL has not yet been met.

Comparisons often are made with bar codes, which have revolutionized the retail industry by making it possible to read information about products automatically, and facilitate the automated processing of transactions.  XBRL has the same potential to revolutionize corporate reporting.

Last year, the SEC substantially expanded the use of XBRL with its new regulations for foreign direct filers. In 2020, it will again be considerably expanded when the requirements by ESMA for making XBRL the  standard for corporate filings in Europe.

A recent report by the Financial Reporting Council of the UK expands on the opportunities presented by these developments and points the way to a new direction in corporate financial reporting over the next several years. It can be found at the FRC site.

In its press release, "The Lab recommends that a single committee be formed with representatives from regulators and Government to drive digital reporting in the UK by;

  1. Exploring the potential benefits of data reuse in the UK, and where needed, align reporting requirements;
  2. Ensuring that regulators work together to adopt ESEF, or UK alternative, to provide better quality corporate reporting data; and
  3. Engaging with companies and investors about this work.

The FRC fully supports the recommendation in the report to form a committee to help promote digital reporting in the UK and will look into how this can be taken forward.

Other recommendations in the Lab’s report include:

  1. Technology companies need to focus on producing tools and packages for non-technical users who create, distribute and consume XBRL data;
  2. Companies should develop a strategy at Board and audit committee level to discuss how  they implement XBRL; and
  3. Investors should engage with regulators, auditors/assurance providers and companies so that XBRL data is of value to the investor community.

Tuesday, December 12, 2017

AI Requires Good Data

The rapid growth in Artificial Intelligence (AI) is being driven by its potential for making important decisions without a need for massive investment in human resources. That much makes economic sense. We know that requires a lot of data to support and inform those decisions. And we know there are massive amounts of data out there  for the taking. But what has not been fully considered so far is that those data are not necessarily in a useful form. In fact, usually not.

Data engineers are those who can retrieve those raw data and conform it to the needs of the analytical tools. Data scientists are those who take these formatted or structured data and analyze it to enable decisions to be made - or, in the case of AI structure it to meet the requirements of the AI software.

There has been a tremendous emphasis on the need for data scientists in the literature. However, a recent report by Forrester points out something else. By far the greatest demand is for data engineers, not data scientists.

In other words, there is lots of data out there, and pretty good capability for using it, but the gap is in turning the raw data into something that can actually be used.

The takeaway?  More attention needs to be paid to the means available to structure and format raw data into platform independent formats.


Monday, December 11, 2017

CPA Canada's Corporate Reporting Awards

On Dec 6, CPA Canada held their annual gala dinner in Toronto to present the awards in their sixty-six year-old Corporate Reporting Contest. Awards are given in Financial Reporting, Sustainability, Governance and Electronic Disclosure. In addition, Platinum and Silver awards are given for overall excellence in these categories.

Twenty-seven organizations were honoured, with Barrick Gold Corporation, BMO Financial Group, Goldcorp and Teck leading the way with Platinum Awards.

One of the fastest changing categories is that of electronic reporting. That includes disclosure on websites and social media and takes into account the adaptability of disclosures to mobile units. High priority is given to innovation, such as disclosure of interactive data tools. Indeed there is an emphasis on interactivity, flexibility, currency, non-linearity and data availability - all features of the internet.

For a detailed article on the results this year, see this site. Also, to download the judge's book, which provides a good discussion of the winners this year, and why they won, go to this site.

Monday, December 04, 2017

Corporate Actions should be reported in XBRL


 It’s time to report Corporate Actions in a standardized electronic format such as XBRL

Corporate actions includes events like dividends, stock splits, mergers, rights, options etc. Such actions are announced by companies through news releases, prospectuses, regulatory filings and more frequently lately, social media, particularly Twitter.

They are extremely time sensitive, because all investors must have access to the information at the same time. Even seemingly innocuous differences can lead to significant unfair trading advantages. Also, the traditional means of communication means that the information must be copied from one document to another, which increase the likelihood of errors being made.

The DTCC, SWIFT and XBRL US released a business case several years ago for the use of XBRL in such filings. This could reduce the timing issue significantly as well as the risk of error.

Since then an international Working Group of XBRL International has been working on this at the international level.


There has been some interest in Canada in this approach and XBRL Canada has been pursuing it. For more information see www.xbrl.ca and www.xbrl.us .