Digital Financial Reporting

The 2009 version of the US GAAP XBRL Taxonomy was released by XBRL US about a week ago.  That page has information helpful in the general use of the taxonomy:

• Home page of the taxonomy: http://xbrl.us/Pages/US-GAAP.aspx
• Viewing the taxonomy (the CI entry point which most companies will use): http://viewer.xbrl.us/yeti/resources/yeti-gwt/Yeti.jsp#tax~(id~6*v~31)!net~(a~78*l~25)!lang~(code~en-us)
• Preparer's guide: http://xbrl.us/Documents/PreparersGuide.pdf

For some reason, a pointer to the web version of the taxonomy (such as this for the PRIOR TAXONOMY http://xbrl.us/us-gaap/1.0/ WHICH POINTS TO THE PRIOR TAXONOMY or this one which points to the IFRS taxonomy http://xbrl.iasb.org/taxonomy/2009-04-01/) is NOT being made available.

Eventually, I am going to build some extension taxonomies which make working with the US GAAP Taxonomy easier.  Not sure when I will get around to it.

In an article written by CFO Magazine Data-Tagging: New Push for a Global Standard, Gargi Ray, manager of technical accounting for global outsourcer Infosys says the following:

"XBRL aligns data with broad concepts, such as revenue, which seems to have helped the conversion to IFRS. Aligning accounting concepts that match up with IFRS concepts makes the migration to the international standards relatively easy compared to migrating spreadsheet-based financial statements"

People have talked, and talked, and talked for years about creating a mapping between IFRS and US GAAP using XBRL.  From what I hear, there is at least one Big 4 CPA firm which is already creating what amounts to a mapping between IFRS and US GAAP.  Whether they will make this mapping available to others is not understood.

I don't understand why the SEC, AICPA, the FASB, or the IASCF has not seen fit (or realized how helpful) such a mapping would be to the process of moving from US GAAP to IFRS enough to actually coordinated the creation of such a mapping which could be made available to everyone.  Seems that it is in their interest if they want people to make this move.

There are people who both understate and overstate the difficulty of creating such a mapping.  And frankly, I personally would not really call this a mapping, but rather a "mapping reconciliation".  Seems to me that the difference between IFRS and US GAAP is quite similar to the difference between tax accounting and US GAAP (i.e. external reporting).

Even better than a mapping/reconciliation would be a Wiki which provides this information.  Combining the characteristics of XBRL, the characteristics of a Wiki, and characteristics and functionality of the Web would create a very powerful tool, seems to me.

You could even take this one step further and create a physical reconcilation template using XBRL which any company could use to articulate their financial information in BOTH IFRS and US GAAP and show every reconciling item between the two sets of numbers.  That would help accountants see the real value of XBRL and also help the transition to IFRS.

XBRL US has announced that the 2009 version of the XBRL taxonomy forUS GAAP is available for public review.  Information about the taxonomy, the review process, and downloads for the taxonomy can be found here.

The finalized version of this taxonomy is slated to be available by February 2009.

The US SEC made available a web page called "Public Validation Criteria".  The web page is located here and states:

"These validation criteria reflect SEC staff’s current views on appropriate validation criteria for XBRL tagging to improve the consistency and quality of XBRL documents submitted to the SEC.  We are publishing this list to help filers and data tagging software companies improve existing products or create new products to automate testing for these criteria. They do not reflect an existing SEC requirement and may change in the future."

This is great addition to guidance which is needed to create the needed "consistency and quality of XBRL documents" as stated by the SEC.  I would speculate that there will be more rules such as these created as inconsistencies and other problems related to data quality are discovered.  It is great that the SEC is doing this proactively.

The IFRS Taxonomy Modules Manager (ITMM) which is available here.  I would encourage business users to take a look at this as it provides some insights for business users.

What the ITMM is trying to do is pull the pieces of a taxonomy together which a preparer would use to construct a business report, likely a financial statement.  The user makes use of the application to select the pieces and then the application builds the underlying XBRL "stuff" (it is called a discoverable taxonomy set or DTS, but business users should not have to understand this level of terminology) which will be used to create an XBRL instance document (an XBRL based business report).

What is good about this is that it shows something very important to realize, particularly if you are a business user.  This important point is that software can be built to do things like this.  All a software application has to do is spit out the required XBRL.  How it gets there is up to the software application.  Don't like how the software application works in terms of features?  Just give the feedback to the software developers, they can make it better.

Some features I would like to see related to this are:

1. Business users don't need stand alone systems like this, they need this functionallity within the tool being used to create the XBRL based business report.
2. Smart wizards which know what sorts of things might go together, nor never go together, would certainly help the user out.  For example, the user is generally going to want ONE cash flow statement, not even be able to select both for one report.
3. Generate "templates" of the common stuff which is used, but the business user can then "turn on" or "turn off" pieces of the taxonomy, rather than have to wade through the entire taxonomy.

These are just a few obvious features.  This list is not knocking what the folks at the IASCF are doing, but rather trying to help business users understand the types of things they could, and should, be asking for from software.