XBRL Projects

The transition to XBRL financial reporting has brought about the development and implementation of hundreds of XBRL projects to establish constancy and efficiency in financial reporting and many other ways to help provide accuracy in reporting and create transparency in business processes.   (XBRL USA, 2011) To comply with required XBRL financial reporting around the world, projects are being developed and implemented to establish requirements, guidelines and processes for compliance. More than 130 projects currently exist internationally, with the majority of the projects located in Europe and Asia. Of the known XBRL projects listed by XBRL International, the top five entity types creating projects are: (World Wide XBRL Projects listing, 2009)

5) Consortium           3%

4) Public Sector        7%

3) Not for Profit        8%

2) Stock Exchange    14%

1) Government          59%

While researching XBRL projects being developed and implemented today, there are a few basic characteristics I’ve noticed as have others looking at this same topic. Here are few of the characteristics associated with XBRL projects according to What-When-How.com (2013)

• In the case of government-related projects, each country has common functions that make use of XBRL within that country. These common functions are regulators of stock exchanges and securities, banking regulators, business registrars, revenue reporting and tax-filing agencies, and national statistical agencies.  One regulator mandating XBRL can require thousands, tens of thousands, hundreds of thousands, or even millions of businesses to report using XBRL.
• The areas of the world where XBRL are taking off the fastest are Japan, Europe, China, and Australia.
• At least one nonprofit (the MIX) has implemented XBRL.
• The implementation to date that will exercise XBRL’s extendibility features the most is the U.S. SEC.
• Standard Business Reporting (SBR) implemented by the Netherlands, Australia, New Zealand, and Singapore is becoming a standardized approach for a government to make use of XBRL.
• (We) are not aware of any significant failed XBRL implementations.
• Stock exchanges and banking regulators are the two biggest groups to have implemented XBRL.
• The European Parliament is the largest governmental body that has expressed interest in XBRL.

Looking at the complexity of XBRL implementation and adoption of both IFRS and US GAAP taxonomies, two projects that caught my interest are the Israeli Annual and Periodic Reports General Purpose Financial Reporting project and the non-profit Microfinance Information Exchange, Inc. (MIX) mentioned above. Both of these projects interested me for two different reasons. The IL-IFRS-GP taxonomy was adopted to make it easier for Israeli companies to communicate their financial data in English, to enable them to attract a wider audience of investment firms; business venture and growth. The MIX has developed their own taxonomy based on the needs of the microfinance industry to support data analysis standards for finance and social performance information. Both of these taxonomies are being developed to provide greater accessibility to a wide range of stakeholders and develop new relationships that benefit the companies using XBRL.

The IL-IFRS-GP taxonomy project owned by the Israel Securities Authority (ISA) is the development of an XBRL taxonomy based on the IFRS-GP to “enable companies listed on the Tel Aviv Stock Exchange to file Israeli annual and periodic financial reports.” (XBRL.org, 2007) This taxonomy labels financial documents and reports in both Hebrew and English. This allows organizations reporting within the ISA to attract more international investors by being able to easily transmit their financial data in a common language. The English taxonomy labels are based on the IFRS taxonomy with the Hebrew taxonomy being translated by the Israel Accounting Standards Board and the labels being created by the ISA. The physical locations for the taxonomies are listed here. 

Companies utilizing this taxonomy will be able to attract a much larger investment base using English as a common language in addition to having a common language to set standards of data analysis within the ISA. They are developing a way to communicate with the rest of the world and not limiting their data sharing and communication to the regions that communicate only or primarily in the Hebrew language. They are also making it possible to retain their financial reports in their regional language while adopting the IFRS taxonomy.

The Microfinance Information Exchange, Inc. (MIX) is a non-profit organization located in Washington, DC, that “collects and disseminates industry, regional, and company financial and social performance data for the microfinance sector, while collaborating with industry leaders to establish and publicize best practices.” (Omidyar Network, 2013) Microfinance is a global industry operating under numerous regulations and reporting requirements assisting individuals and small business obtain financing when it would normally be impossible. The Microfiance industry not only addresses the issue of financial need it also considers the social impact the business or individual will have on their community and country. MIX addresses the issue of transparency, promotion of improving social impact at the industrial level (Omidyar Network, 2013) and has utilized its expertise in data collection and financial analysis to establish itself as a leading contributor for setting best practices and establishing industrial standards in accounting, financial analysis, data collection, and benchmarking processes. (Microfinance Information eXchange, Inc., 2010)

This non-profit organization’s project uses XBRL for their data collection which enables them to develop a standard reporting framework for microfinance data and financial reporting. MIX developed an XBRL taxonomy to help standardize the microfinance industry and provide more accurate accessible financial and social data to the mainstream markets. I found it very interesting that they are not only using the taxonomy for financial reporting but for reporting on social performance as well. The final working draft of the MIX Microfinance Taxonomy 1.0 (MIX PWD) was published on June 19, 2009. (Microfinance Information Exchange, 2010) The taxonomy has been validated and acknowledged by XBRL International. 

For detailed information on the implementation of MIX taxonomy please view the MIX XBRL Case Study located here: http://www.xbrl.org/CaseStudies/MIX%20XBRL%20Case%20Study%2003.03.10.pdf

Over the past three weeks I've learned that there are numerous uses for implementing an XBRL taxonomy, not just for meeting financial reporting standards, but for data collection, internationalization of financial reporting, communication and increasing accuracy, efficiency and transparency. These are only two of hundreds of projects being developed to standardize data collection and analysis. The issue is this…are all the projects utilizing the same or similar elements of XBRL categories? What happens when all of the custom XBRL projects are complete and some are based on IFRS while others are based on US GAAP while still others like MIX are based primarily on industry standards? Will they communicate across industries, regions, countries? Will we ever reach a time when we truly have a universal, international standard? I believe the work on these projects is at least a step in the right direction. I have a sense that there is a consistent goal and a similarity among all the XBRL taxonomies being developed that will allow them to cross industries, regions and countries for the primary purpose of data sharing and analysis and most importantly for communication.  

Resources

World Wide XBRL Projects listing. (2009, July 29). Retrieved from XBRL Blog Magazine: http://xbrlblog.com/world-wide-xbrl-projects-listing.html

Financial Explorer. (n.d.). Interactive Diagrams Easily visualize Change in Important Values. Retrieved from Financial Explorer: http://209.234.225.154/viewer/about/tour.asp

Microfinance Information Exchange. (2010). XBRL. Retrieved from MIX Microfinanace Information Exchange: http://www.themix.org/microfinance-reporting-standards/xbrl

Microfinance Information eXchange, Inc. (2010). Services. Retrieved from Microfinance Information eXchange: http://www.themix.org/services/overview

Omidyar Network. (2013). Microfinance Information Exchange. Retrieved from Portfolio: http://www.omidyar.com/portfolio/mix

what-when-how.com. (2013). Exploring Common Uses of XBRL. Retrieved from what-when-how.com: http://what-when-how.com/xbrl/exploring-the-common-uses-of-xbrl/

XBRL USA. (2011, July 24). The Power of XBRL Demostrated. Retrieved from XBRL USA (Blog): http://xbrlusa.wordpress.com/2011/07/24/the-power-of-xbrl-demonstrated/

XBRL USA. (2012, August 05). Another Free XBRL Toos Changing the Way We Consume Information. Retrieved from XBRL USA: http://xbrlusa.wordpress.com/2012/08/05/another-free-xbrl-tool-changing-the-way-we-consume-information/

XBRL.org. (2007, September 01). Isreali Annual and Periodic Reports General Purpose Financial Reporting. Retrieved from xbrl.org: http://www.xbrl.org/il/ifrs/gp/2007-09-01/il-ifrs-gp-2007-09-01-summary.htm

xbrl.us. (2007-2013). Tools & Data. Retrieved from xbrl.us: http://xbrl.us/research/Pages/default.aspx