A new consultation paper from the Committee of European Securities Regulators (CESR) could end up having a significant impact on both the adoption of XBRL across Europe and the expansion of the global XBRL standards-based financial information ecosystem.The paper discusses the development of pan-European access to financial information disclosed by listed companies based on two options for officially appointed mechanisms for the central storage of regulated information (OAMs):

1. A network model (i.e. some way to bridge requests for data across countries)
2. A single European OAM (aka nirvana)

The aim being to make it easier to access financial information submitted in any one EU country to cross-compare with any other. Harmonization of submissions – especially via the use of standards-based metadata –  will be essential to make this work, so here’s the interesting bit (p.16) in full:

Common input formats and standards

58. Currently most OAMs allow different types of file formats for filings. The information is usually stored in PDF, text or HTML format. Only one OAM requires filing of financial information in XBRL format and another allows it. Other regulated information than financial information is not stored in structured format in any OAM. Most OAM databases are open for different file types. As such XBRL files could also be stored.

However, in order to be able to benefit from information stored in structured format most OAMs would need to adjust their systems. This would naturally impose development costs for them.

59. CESR has analysed the possible use of XBRL for filings of financial information. A call for evidence on the use of standard reporting format (Ref. CESR/09-859) was published in October 2009. CESR received 39 responses to the call for evidence. In general, views were split. Concerns were voiced over possible costs of XBRL reporting and the lack of real market demand for it. On the other hand, those supporting XBRL reporting argued that XBRL would allow improved comparison and analysis of issuers.

60. CESR has agreed on undertaking a cost/benefit analysis on possible transition to mandatory XBRL filing within a period of five years. Such a period would cover a preparation time of three years and a voluntary filing program of two years prior to the start of the mandatory filing requirement. The filing requirement would cover periodic financial information of issuers covered by the TD and preparing their financial statements in accordance with IFRS. CESR anticipates issuing a consultation paper on the issue in 2011.

Which could help to drive the following benefits for three major stakeholder communities: financial information consumers, regulators and issuers:

5.1. Benefits of an integrated pan-European OAM network

75. For end users, an integrated network could allow easier cross-border searches for information and thus lower their costs of access to information. If information were available for searches also at the CAP level, an end user searching for information on issuers in multiple Member States would be able to find the information with a single search instead of having to visit the websites of respective national OAMs where searches would only cover issuers of that single Member State.

76. For regulators, an integrated network could ease benchmarking of issuers‟ filings. For example, enforcers of IFRS could benefit from easier cross-country comparisons of application of a specific accounting standard by issuers active in certain industry.

77. Issuers could also benefit from easier benchmarking with their competitors and an integrated pan-European OAM network could bring additional visibility for the issuers and attract new investors, which could potentially reduce the issuers’ cost of capital.

It’s only a consultation paper but pan-European IFRS filing in XBRL within 5 years could be on the horizon. And if you want to know what that means in some degree of detail, then view these recently released examples here.

Tags: EU

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