Digital Financial Reporting

The ITA (Interoperable Taxonomy Architecture) project has published a global filing manual for financial statement-type XBRL filings to regulators. You can read more about The Global Filing Manual here.

If you recall from a blog post around May 2009, the ITA is a joint initiative between the US SEC, the Japan FSA, the European Commission and the IASC Foundation XBRL team, and aims to converge the XBRL architectures of three taxonomies: EDINET, IFRS and US GAAP. The announcement states of The Global Filing Manual:

The manual contains a set of rules which provide guidance on the preparation, filing and validation of XBRL filings created using the IFRS Taxonomy, the EDINET (Electronic Disclosure for Investors’ NETwork) Taxonomy or the U.S. GAAP Taxonomy.

I have not been through the 65 page manual yet, and I don't know if the SEC is going to require the manual.  What I speculate is that if you are compliant to the EFM (Edgar Filer Manual), then you will likely be compliant to The Global Filer Manual. If that is the case, then while I would see is global manual as insufficient, it shows an attempt to move toward one global syntax for financial reporting. Key to achieving global financial reporting is how close the US will move toward IFRS (International Financial Reporting Standards).

What is interesting is the trend I see. CFO: 18,000 Tagging Errors in XBRL Filings So Far, XBRL for the Future: XSB Releases Strategic Initiatives calling for abstract models in UML and application profiles, the investment roadmap published by FIX, FPL, FpML, ISITC, SWIFT, XBRL and FISD. The trend: People seem to be getting more and more interested in the quality of XBRL.

I predicted a lot of this in my book XBRL for Dummies. For example, I explain and promote the use of application profiles in my book.

All this will result in XBRL which is easier to use for business people. I also see this as another step closer to achieving a global standard financial statement not for just public companies, but for all companies: public and private.