Greater transparency, lower filing costs, reduced risks and better data quality – these long-promised benefits of XBRL are finally becoming a reality. As the XBRL landscape continues its swift evolution, we discussed the latest developments with five experts – as well as with a representative of the SEC.
Vintage Question > XBRL is currently being used primarily for SEC quarterly filings, but does it hold possibilities for broader applications in accounting and financial data gathering? For which other sectors or tasks do you think it holds the most promise (e.g., insurance)? What about S-1, S-3 and S-4 filings?
Campbell Pryde > We think that XBRL should be used for anything with financial statement information. Overall, we feel the SEC needs to have a much more comprehensive data strategy.
If you’re asking for information from the capital markets today, they ask for the same information in many different ways. We have said repeatedly, “Please, if you’re asking someone to tell you what their assets are, ask for that information in a consistent way,” so that if someone reports assets to the SEC once, they don’t have to keep reporting it to them over and over again in a whole host of different formats.
One of the things we’d like to see is much more of this data being requested in XBRL.Data such as proxy information, hedge and mutual fund positions, corporate actions and earnings releases would be more useful for investors inan XBRL format.
Outside of SEC reporting, we also have a few other initiatives. One is with the insurance industry, to get construction industry data in an XBRL format, and we’re also about to kick off an initiative with the Department of Energy, to have data on the financing of solar projects in XBRL as well. In addition, the Department of Labor (DOL) is looking to revamp the data collection for pension plans and this process would be greatly enhanced if data was reported in an XBRL format. Currently the DOL collects pension plan data in a PDF format and is used to guarantee pension plans by the government.
Hudson Hollister > There is currently legislation proposed in Congress, the Financial Transparency Act, that would require the SEC to adopt a structured format for everything that it collects. Not just the financial statements, or even just the 10-Ks and 10-Qs, but every one of the 600 or so forms that public companies and other entities have to submit to the SEC.
This would make the entire picture, all the disclosure that the SEC collects, into open data, searchable and available to everyone. We see these moves by the SEC as part of an overall move across all of government away from documents and toward standardized, searchable data. The Financial Transparency Act would go even farther than what the SEC is trying to do right now, but the actions the agency is currently taking are going in the same direction. It’s very important.
Ilya Vadeiko > I would speculate that the next great expansion of XBRL, and especially iXBRL, in the US should be into MD&A sections of financial reports, corporate actions and insurance. To our knowledge, those are the areas where the demand for structured and timely data is the greatest.