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;
- Exploring the potential benefits of data reuse in the UK, and where needed, align reporting requirements;
- Ensuring that regulators work together to adopt ESEF, or UK alternative, to provide better quality corporate reporting data; and
- 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:
- Technology companies need to focus on producing tools and packages for non-technical users who create, distribute and consume XBRL data;
- Companies should develop a strategy at Board and audit committee level to discuss how they implement XBRL; and
- Investors should engage with regulators, auditors/assurance providers and companies so that XBRL data is of value to the investor community.