A recent interview published on www.irwebreport.com has caught my attention. In the article, Michelle Savage (VP of Communications at XBRL-US) has provided some really, really good advice for Investor Relations Officers (IROs) about what they need to know and do about XBRL.
According to Michelle, the biggest challenges from an IRO standpoint are:
The challenge is getting educated and feeling comfortable with what elements are being chosen — and being comfortable with how your own financials are converted into XBRL. That comes down to understanding not the technology, per se, but rather how your financial guys define your statements using XBRL tags, as well as how your industry or market peers and competitors do the same thing.
Those are the kinds of questions analysts will start focusing on — e.g., “Your peers use this particular tag for ‘inventory’ — why don’t you?” Using a different tag is kind of a red flag. So IROs need to appreciate this analyst perspective, and start thinking what questions analysts and investors will be asking about how they’re using this.
The second big challenge from an IR standpoint is that management is going to begin looking to the IRO to figure out how you can use this. IROs will need to say, “This is an opportunity. What can I do when this data starts coming through and is more readily available?” For example, you’ll want to look at other IR websites to see what others are doing. You’ll want to analyze how XBRL can help you provide better answers to management. You’ll also want to determine how the tool gives you the information you need to provide better answers to the investment community, which will now be getting better and more consistent information. So, it’s a challenge with many opportunities for IR — if you’re educated on these things.
I couldn’t agree with Michelle more. And, I like to share with you how the same beliefs have shaped how Rivet has designed our products and specific features in our Crossfire Reporting Platform.
Understand how your financial guys define your statements using XBRL tags, as well as how your industry or market peers and competitors do the same thing.
In both of our tagging products (Crossfire Preparer) and viewing/reviewing products (CrossView and Dragon View), we have provided the functionality for preparers and investors to easily understand what “tags” were selected (base or extended) and how comparable if the tags were base elements for both their market peers and the specific industry the company belong to.
CrossView -- Highlight the Extended Elements Used
Dragon View -- Shows the Usage Percent for All SEC Filers and Specific Industry
This is an opportunity. What can I do when this data starts coming through and is more readily available?
We asked the same question, believe it or not, in 2005. We saw the movement of XBRL not just in US but all over the world, and we asked, “What would investors need in order to realize the benefits of the interactive financial data can bring?” Crossfire Analyst was designed to address the need to intelligently and easily analyze the interactive data. Its remarkable support for interactive data enables users to easily analyze data from one or multiple XBRL sources such as the SEC (Corporate Financials and Mutual Fund Risk & Return) and FDIC Bank Call Data, and international sources such as filings from the Japanese and Shanghai stock exchanges.
Crossfire Analyst -- Create and Publish Benchmark Reports and KPIs
Crossfire Analyst -- Users can Easily Combine Interactive Data from Multiple Sources
At the end of the interview, the author asked Michelle “what do you love about your job?” And her response was “It’s working with passionate people who are excited about this. We’re doing something that makes a difference.” She is absolutely right, what’s not to love about that? Thanks, Michelle.
Tags: Analytics, Investor Relations
