The move towards XBRL as the standard technology for regulatory filing continues to gather momentum, India being the latest country to issue a mandate. The Indian Ministry of Corporate Affairs (MCA) now requires all listed companies and certain unlisted companies to file their balance sheets and profit and loss accounts for the year ended 31st March 2011 in XBRL format.
The key to XBRL filing is the ability to produce XBRL instance documents as efficiently as possible. Following the success of our Seahorse accounts tagging solution in the UK market, we are updating the solution for Indian companies. Seahorse already supports the Indian taxonomy and we are currently adding a series of relevant validation rules to ensure MCA compliance.
My previous blog post talked about review sheets in Seahorse™. However, even if you’re not using Seahorse, you can still check the quality of your iXBRL documents prior to filing. Why is this important? Because even though HMRC has indicated they will not penalise filers who make best endeavours to comply with the mandate, their guidelines also state that incorrect or missing tags may in certain circumstances prompt further risk assessment and follow-up.
Enter Magnify™, our desktop document review tool. Magnify uses a checklist approach to guide you step by step through an assessment of your iXBRL document. Wherever possible it performs automated tests, verifying calculations and highlighting any discrepancies and errors. No matter whether you produce your iXBRL in-house, use the output from an accounts production package or outsource the whole process to a third party, Magnify gives you that extra peace of mind knowing that you’re submitting quality documents that will pass the HMRC gateway without issue.
So, you’ve finished tagging your iXBRL accounts, but what happens if others need to review them off-line prior to sign-off? Till now that hasn’t always been easy if senior management doesn’t have access to your tagging service. With Seahorse, it’s a problem solved.
Seahorse lets you export an Excel spreadsheet detailing every line item in your iXBRL document, showing the line item description, who tagged it, the concept label, the confidence level of the chosen tag, the suggestion ranking and whether the tag belongs within the Minimum Tagging Set. It’s particularly useful for reviewing the consistency of your work and providing an explicit audit log for your filers.
iXBRL has been a reality since April, but post-mandate it’s clear that companies are still struggling to cope with HMRC’s requirement for iXBRL filing. During a series of recent iXBRL webinars we questioned delegates about their filing plans. Many had filed early to avoid the issue – for this year at least – and others had outsourced the problem, but a significant percentage claim little understanding of iXBRL and remain ill-prepared to meet the new filing obligations. Most expressed concern about the amount of additional time they would need to spend on the conversion process.
Mindful of this prevalent view, we have been constantly evolving our Seahorse tagging tool to cut the conversion time.
From the beginning Seahorse included a unique autotagging facility, suggesting tags for each concept in the financial tables and letting you then review and confirm the appropriate tag. This process has always been quicker than traditional ‘drag and drop’ methods, but the new Bulk Review facility in the latest Seahorse release has made it even faster. No longer do you have to review suggestions line by line, you now have the option to confirm all ‘high confidence’ items – or even all items in the table. Three clicks are all you need. Seahorse also now interprets simple column headers containing only a year (e.g. ‘2011’) and expands these to the correct reporting period, saving you even more time.
To speed up the process still further, Seahorse now immediately alerts you if a tag you are about to create has already been used elsewhere to report a different number.
Are you prepared for iXBRL?
HMRC organised a highly successful iXBRL Solutions event at the Chelsea Football Stadium on June 30th. With a wide array of vendor exhibits, there was a solution for everyone. The interest in Seahorse was phenomenal. We appreciated the attendees’ obvious interest, as well as the air of conviviality and general willingness to squeeze in among the throngs who gathered all day long to look at our demo and talk about how Seahorse converts accounts from Word or Excel into iXBRL. Those who made themselves known to us ranged from sole practitioners to enormous accounting firms and FTSE companies. It was also great to see people who had introduced themselves at previous events returning to have another look and chat about the finer details. The demand for Seahorse is clear!
So, lots of people have been wondering about what we have been up to over the last few months. It’s true. We’ve been pre-occupied. But now we are beginning to take the wraps off. SpiderMonkey! It’s here!
Based on Eclipse, SpiderMonkey offers a phenomenal new experience for taxonomy builders everywhere. It provides a user interface that offers all the power of XBRL, but in a user-friendly way. SpiderMonkey is based on True North, so you can be completely confident about the output. As one of our early testers says "The UI reflects a complete understanding of the XBRL spec – not some approximation to it". But that’s what you expected from us.
Now in Beta… (the program is pretty full up, but if you can convince me that you’ll really work it, you know what you are talking about, and will file bugs and enhancement requests, we might squeeze you in). In general, you can Sign Up to get it on general release.
PS: Did you hear us say "three way merge"??? Yup. It does that too!
From today, interactive data suddenly became an important part of doing business. Today we launched EarningsDirect with Business Wire. This is a world first — an entirely new communications tool for investor relations and finance professionals. It allows companies’ all-important earnings data to be communicated to the media, market data services, analysts and investors in a format that can be instantly, accurately and unambiguously used in analysis and investment models.
Financial data first gets disseminated as an earnings release, in text format. This generally occurs two or three weeks before regulatory filings, like 10Q statements, are lodged with the regulators. A very few key numbers get punched into financial news stories and active investor models within a matter of 10 – 20 minutes of the earnings release being made available. And any number of market data services either key the information in at off-shore facilities in India or Eastern Europe or parse the information out of the text and into databases using fairly sophisticated software over the next hours and days. Naturally, and much to the horror of a lot of the accountants and controllers who sweat over the production of financial statements, in the process of all this manual wrangling, the data gets drastically summarised. Inevitably, mistakes creep in.
EarningsDirect changes all that. Selected information within the earnings release are disseminated simultaneously in XBRL format, which means that the information can be used without rekeying, re-parsing or manual manipulation of any sort. News stories can gulp down EBITDA, changes in revenue, earnings growth, SG&A improvements or the effect of a merger, instantly. Analysts’ models can absorb the base data that they need to calculate hundreds of ratios instantly. The really great thing about this new way of communicating, is that we can’t begin to work out all the ways that the market will use all this instant, accurate data!
Ok, great — how does it get turned into this magic format? It’s a pretty simple process. Business Wire clients download a Microsoft Excel template, fill it in and upload it to our software running on the Business Wire servers.
Clients get back a special Intelligent Financial Statement™, or IFS. An IFS is a special PDF file containing a range of CoreFiling proprietary technologies. It looks like a set of financials – tables setting out familiar information like a balance sheet, income statement and cash flow. But if you hover your mouse over a number in the document, TagTips™ tell you how the information has been marked up, or tagged, in XBRL. The data document itself is embedded right inside the PDF, accessible at a click of a button from within Adobe Acrobat Reader. As a result, the controller or CFO can gain complete confidence about the manner in which the information is being communicated to the market.
Once approved, this document – the Intelligent Financial Statement™, as well as the XBRL in its raw form, is disseminated, with the earnings release, simultaneously, to global capital markets by the Business Wire NX system, ready to be used.
It’s like corn on the cob. It’s better to eat it fresh, within seconds of it being picked, than the kind that’s washed in chemicals, cut down to a uniform size to fit into uniform packaging and then refrigerated or frozen and shipped over a period of days or weeks from somewhere you have trouble finding on the map. Both are recognizably corn. But the mass produced kind is missing quite a bit of its goodness and never tastes quite the same.
Won’t this just be a sub-set of the information in the earnings release, I hear you ask? It depends. There are three levels to the EarningsDirect service. Level 1 is a simple template, containing around 90 concepts, critical to almost every company. It’s free for the next two quarters of earnings. Business Wire client? Talk to your AE about EarningsDirect Level 1. Level 2 involves more detailed data, specific to certain sectors, ensuring comparability and accuracy for larger, as well as more specialized businesses. But Level 3 is a completely customised template. CoreFiling specialists create it to meet the communications objectives of each company. Clients can use the same template each quarter. Again, all the client needs to do is fill in the spreadsheet. So EarningsDirect is easy to use. Easy to understand. And makes sure that financial performance messages get across accurately, unambiguously and (did we mention?) instantly!
Lastly, some people will be wondering how analysts and media organisations can consume this data. Hint – some of them already can. For the others, it’s a simple exercise that provide a rich new seam of crucial investment information. Don’t know how? Talk to us, or (if you must) the other XBRL vendors. We can all help.
EarningsDirect. It’s powerful reporting made simple by CoreFiling. And Business Wire!
Recently we signed an MOU with XBRL-US, providing a new collaborative taxonomy tool called TRAX to help business experts review the work of taxonomy developers. The tool has now been launched and is ‘on trial’ through to the end of the year. Other parts of this site give you plenty of information on the tool. What follows is part justification, part theory: to put it into context.
Some of the most powerful new technologies today are loosely termed “social tools”. They provide a mechanism for collaboration. Our hope is that by bringing on-line collaboration into the middle of the process of creating XBRL taxonomies, project teams will build an increasingly familiar process.
It should become more than a process. It should be a ceremony – a set of steps that everyone involved in the exercise understands and expects everyone else to follow. Ceremony is a term that I’ve borrowed from the security folk, who are now using it to describe what is required to grant an electronic identity to someone. A good term, with wider application. What does it mean in the context of XBRL taxonomy development?
Not long after we started CoreFiling, we began to discuss taxonomies and, specifically, taxonomy review. The parable goes something like this:
The acolytes spend many days and long nights labouring over the construction of a set of definitions, that, once mangled with tools, scripts, or notepad, becomes a taxonomy. And they consider it good, if in need of some fresh eyes. Thus, each time that a taxonomy gets created a great hue and cry goes out. “Please review this!” beg the acolytes. Generally, although not always, their beseechings fall on a silent multitude of accountants, accounting standards setters, analysts and preparers. And then there is gnashing of teeth and tearing at hair amongst the acolytes. “We have built it. And yet they haven’t come,” they call out. And then (finally) there is some review by some people and the acolytes try to tell each other that it will be enough. But often it isn’t.
It seems to me that to create a standard, (and a taxonomy is a very specific kind of standard) you need subject matter experts to reach agreement about what the standard should say. Just as importantly, you need an authority that will publish it and maintain it. For the moment, let’s assume that authorities are easier to come by than subject matter experts. A topic for a later note, no doubt.
So, why is it difficult to get business experts to look at XBRL taxonomies to see if they will meet their needs? Well, there have been a bunch of reasons, including the rather obvious fact that until recently, quite a lot thought it would be a waste of time, as they didn’t want to create reports using XBRL. The tide in that area is changing quite quickly, so now there are very good reasons for business experts to review them. However, I think there are a couple of other important reasons they might continue to hold out, if it were not for TRAX (and no doubt its successors): Accessibility and Trust.
Subject matter experts tend to be much in demand, so, among other things, it’s necessary to ensure that they don’t have to waste time understanding something they don’t need to. Something like XBRL. Equally, subject matter experts are very unlikely to be able to spend very much time together, so it would make sense if they could collaborate over the internet. Combined – the need for the materials to be available in a form that is easily understood, and the need for the materials to be available at all hours of the day or night, anywhere on the internet, captures what I mean by “accessibility”.
Finally, subject matter experts need to trust that, if they are going to put effort into reviewing something, their comments will be used and not ignored. Transparency in the comment process is really important to their commitment. Nothing seems to put people off faster than not seeing how their contributions have made a difference. That’s trust.
So, TRAX, which came about following some discussions internally, and then with our good friends at both WebOrganics and the one and only Galexy, is the result. It’s kind of nice that this collaborative tool was built collaboratively! We hope that TRAX will make the process more accessible, since we can skin it to make even XBRL seem reasonably straightforward, and since it is a creature of the web, merely subject to continuity of power at a very big, very red building in the London Docklands, it should be nearly ubiquitously available. And we hope that trust will be pretty straightforward, as you can always see “My Issues” and how they have been dealt with by other commentators as well as the project moderators. Creating a whole new set of incentives.
So while the system gets put through its paces (and there are a number of new features that will get added during the course of the trial, and no doubt a number of bugs stamped out as well), we’ll be most interested to see if it helps make it easier for subject matter experts to give a little of themselves. And perhaps a new type of ceremony will start to get created.
If you would like to contribute to the review of the XBRL-US Broker-Dealer taxonomies, please contact Brad Homer (bhomer) at (at) the AICPA (aicpa dot com). If you have your own taxonomy project and would like to experiment with TRAX, please drop me (john turner at corefiling dot com) a line.