A post from XBRL Europe to a number of news lists states that the European Parliament passed a law yesterday which requires all listed (public) companies in the European Union to report in one standard electronic format.
This is the agreed to text of the law:
(21a) A harmonised electronic format for reporting would be very beneficial for issuers, investors and competent authorities, since it would make reporting easier and facilitate accessibility, analysis and comparability of annual financial reports. Therefore, preparation of annual financial reports in a single electronic reporting format should be mandatory with effect from 1 January 2020, provided that a cost benefit analysis has been undertaken by ESMA. ESMA should develop draft regulatory standards for adoption by the Commission, to specify the electronic reporting format, with due reference to current and future technological options, such as eXtensible Business Reporting Language (XBRL). ESMA, when preparing the draft regulatory technical standards, should conduct open public consultations for all stakeholders concerned, make a thorough assessment of the potential impacts of the adoption of the different technological options, and conduct appropriate tests in Member States on which it should report to the Commission when it submits the draft regulatory technical standards. In developing the draft regulatory technical standards on the formats to be applied to banks and financial intermediaries and to insurance companies, ESMA should cooperate regularly and closely with the EBA and the EIOPA, in order to take into account the peculiarities of these sectors, ensuring cross-sectoral consistency of work and reaching joint positions. The European Parliament and the Council should be able to object to the regulatory technical standards in line with Article 13(3) of the ESMA Regulation, in which case these standards shall not enter into force."
While the law does not specifically state that XBRL must be used, and the fact of the matter that it really makes zero difference what format is used, financial reporting is going digital in Europe. So, for Europe to achieve meaningful information exchange they will do one of two things:
- Analyze the experiences of the US SEC and proactively make any necessary adjustments to not repeat mistakes
- Repeat the same mistakes as the US SEC and then realize what they need to do successfully exchange information electronically
Time will tell what the EU chooses to do.