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June 30th, 2011 by Stewart McKie - Executive Advisor
It’s easy to forget that the link between semantics and accounting was acknowledged long before the semantic web and XBRL. Back in 1972, accounting academic Andrew A Haried published a paper in the Journal of Accounting Research called The Semantic Dimensions of Financial Statements. As you can see from page 1 of his paper, he hit the nail on the head for the rationale for XBRL. First he quotes Goldberg (from the earlier An Inquiry into the Nature of Accounting – 1964) who says:
It is scarcely an exaggeration to say that the problem of communication is the axial problem of accounting.
Then Haried goes on to say that one of the major contributing factors to the problems of external accounting communication is insufficient standardization of the terms used in financial reports. Fast forward to Houghton in 1998, the birth year of XBRL, and you have another perspective that supports the general need for and use of XBRL and the utility of an agreed taxonomy specifically:
…the study of shared meaning between users and producers of accounting information is central to the study of the effectiveness of accounting communication.
So semantics has always had a key role to play in accounting communication, which suggests that the semantic web will only further enhance that role. However, here at Rivet we are more interested in the creation of shared meaning between users and producers of accounting communication and we think that XBRL is one tool to help us as we work to create new apps to support generating this shared meaning.
Tags: semantics
Posted in Communication, XBRL | No Comments »
June 29th, 2011 by Stewart McKie - Executive Advisor
Many people in Europe might be in favor of value-added tax (VAT) having no future but unfortunately it’s here to stay. So I wondered if XBRL figured in this future and went to a 2010 EU green paper On the future of VAT to find out. I discovered that apparently XBRL does not figure in the future despite this very clear rationale for it to be considered in section 2.4 of the paper:
The EU’s VAT system has evolved slowly compared with the technological and economic environment, which has seen rapidly changing business models, increasing use of new technologies, the growing importance of services – now accounting for about 70% of economic activity – and globalisation of the economy generally.
However, these technological changes may as well offer the possibility of new and alternative ways of collecting VAT to reduce burdens on business and VAT losses. The existing collection model has remained substantially unchanged since the introduction of VAT.
While XBRL is considered suitable for filing relatively complex, detail tagged 10-Qs and Ks in the USA and corporation tax returns in the UK, it’s apparently not being considered for filing comparatively simple quarterly VAT returns in the EU. Bizarre. Even this response to the paper from the tax faculty of the ICAEW does not even mention XBRL.
Tags: VAT
Posted in XBRL | No Comments »
June 29th, 2011 by Stewart McKie - Executive Advisor
XBRL: the teenage years is nothing to do with banging your head on a taxonomy or sniffing month-end reports fresh from your inkjet. But this ‘Financial Map’ blog post does make a number of good points that are worth repeating here. Having said that I’d guess that this post was in fact authored by a machine that has merely culled nuggets from the web and then compiled them into a barely-logical burbling. How else can you explain EDGAR being compared to the English king of the same name? But anyway the good points to remember about XBRL and XBRL GL are: Read the rest of this entry »
Posted in XBRL | No Comments »
June 27th, 2011 by Stewart McKie - Executive Advisor
I was revisiting Stephen Batchelor’s excellent book Alone with Others when I was struck by some clear links between Buddhism, Excel and XBRL. These center around the interplay between authentication and anxiety. So if you are in the mood for a little noodling on this topic, instead of say scarfing down a sweet but shallow Twinkie, then read on. Read the rest of this entry »
Posted in XBRL | No Comments »
June 24th, 2011 by Stewart McKie - Executive Advisor
Using XBRL for sustainability reporting just got a shot in the arm via the Global Reporting Initiative’s (GRI’s) newly announced collaboration with Deloitte in the Netherlands to resurrect the moribund GRI XBRL taxonomy. Hopefully the current taxonomy will be revised and updated to reflect the new demands of so-called ‘integrated reporting’ that expects financial and sustainability (or other non-financial) data to be connected to deliver a more holistic perspective of an organization that encompasses both business performance and behavior.
Posted in Communication, Sustainability, Taxonomies, Transparency, XBRL | No Comments »
June 24th, 2011 by Stewart McKie - Executive Advisor
Yes. Old grumpy face is back to encourage you to take a look at a new book by W. David Stephenson called Data Dynamite – How Liberating Information Will Transform Our World. The book calls for a 4-step process to liberate data and free it from the shackles of a document-centric world:
- apply “tags” to it the first time it is entered, giving data meaning and context
- distribute it automatically and in real time, when it will be of most use
- make it available to everyone in an organization – and often outside it – who needs the data (rather than to just a few elites)
- provide new Web 2.0 tools letting non-technical users analyze and act on data collaboratively.
To achieve this worthy aim, the book also proposes a 13-point Liberating Data Manifesto that you will be glad to hear does not involve either burning a bra or shattering a glass ceiling – neither of which are now advisable as they both fail health and safety regulations.
Posted in Transparency, XBRL | No Comments »
June 20th, 2011 by Kevin Berens - CPO
We know that it’s pretty easy to analyze XBRL data when companies are using the same base taxonomy element.
- What about when companies have used different base elements?
- What about companies that did not tag the totals but instead tagged all of the details?
- What about companies that tagged using an extended element?
It’s still a simple process to compare multiple companies even if some use base elements and others use extended elements. Read the rest of this entry »
Posted in Analytics, XBRL | No Comments »
June 17th, 2011 by Phil Mennona, CPA - Senior XBRL Compliance Manager
Last night the SEC posted new Staff Observations dated 6/15/11which include the SEC’s observations about some of the most common and significant issues from the filings analyzed by the SEC. Some of the more notable items included in the document are: 1) Format of the statements, 2) Negative Values, 3) Extended Elements, 4) Completeness of tagging, 5) Modeling of Level 4 tagging, and 6) Units. Understanding each of these items can greatly assist in the quest for submitting SEC compliant, high-quality XBRL.
Link: Staff Observations From Review of Interactive Data Financial Statements »
Tags: SEC Staff Observations
Posted in Compliance, XBRL | No Comments »
June 17th, 2011 by Kevin Berens - CPO
Thanks to companies leveraging XBRL to report their financials, I can now compare companies side-by-side – and I can do it more quickly than ever before.
I created a report to compare 24 different companies. In a single report, I gathered data for the 3 previous months and created 16 different ratios for these companies. This report was created in just a few hours. Now, when any of these companies file, this report is updated automatically with no additional work involved. I am even alerted when these ratios fall outside the norms that I defined.
Because these financials were tagged using XBRL, I know the answers to questions within minutes that in the not too distant past would have taken me weeks to figure out. Read the rest of this entry »
Posted in Analytics, XBRL | No Comments »
June 15th, 2011 by Kevin Berens - CPO
Imagine a world where a company files today with the SEC and you are automatically alerted if their Return on Sales has dropped below 20% and their Quick Ratio has dropped below 2.0. Well that world is today, thanks to XBRL.
Prior to XBRL, this was not possible, unless you paid to have this information delivered to you. Companies would produce their SEC filings in HTML. To get at this data, you would go the SEC site, copy and paste the data into Excel, and begin the process of “fixing” the data (modifying all of the negative numbers, etc) because the HTML tables did not come over seamlessly. Now imagine doing this for 20 of your peers. Read the rest of this entry »
Posted in Analytics, XBRL | No Comments »
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