IFRS VERSUS XBRL
Accountancy from IFRS perspective
Accountancy nowadays has become a very disputed and interesting domain for all people involved in the business world. There are a permanently increasing number of users of financial-accounting information of various types, such as shareholders, managers, investors, employees, banking establishments, business partners, securities exchanges, tax authorities etc. The increased importance of accountancy is also corroborated by its new definition as "the language of business".
The accounting system adapted to the economy of compet 22422o146w ition is strongly conceptualised; utilisation and circulation of accounting information have to be performed in accordance with the unanimously admitted and generally accepted accounting principles.
Accounting information is to be used in two forms:
This dual representation of the operation cycle implies dividing accountancy into two parts: financial accounting and managerial accounting; thus, the same result is obtained in two different ways.
laborate reports, like financial statements, analyze financial data, share financial data, verify data.
XBRL stands for Extensible Business Reporting Language:
X for "eXtensible": "Extensible" is computerdesk for "flexible" or "adaptable". It means that everybody can extend or adopt the language for different needs of business information.
B for "Business": because it takes care of business.
R for "Reporting": The language is designed to reports information about business, such as financial information produced in accounting laboratory and used by a huge number of users for decision making.
L for "Language": It is a computer markup language for marking, or tagging information.
creating a common vocabulary for financial information description.
XBRL - short history
o in 2001, a pilot program by the Bank of America succeeds in converting financial data to XBRL and the credit analysts can review loans faster;
o in 2001 in
o in 2002 Microsoft becomes the first technology company to file financial reports in XBRL;
o in 2003 the Japanese National Tax Agency, accepts XBRL formatted tax filings;
o in 2004
o in 2005 the SEC set up a program for filing financial reports in XBRL and lated was extended to mutual funds filers. The US Federal Deposit Insurance Corporation started to collect reports in XBRL format from 8,300 banks under its authority;
o in 2007 the Dutch Ministry of Finance and Ministry of Justice implement all corporate reporting processes using XBRL;
o in 2007 the Singapore Accounting & Corporate Regulatory Act mandated all filings in the XBRL format by November 1st
o in 2007 the Japanese FSA made the decision to provide XBRL information for its registrants by 2008.
The IFRS are adopted in over 100 countries and XBRL is part of this implementation. In order to be able to tag all the different meaningfully and identify them to software, the creators of XBRL made unique tags for each concept that can appear in a financial report and organized these tags into taxonomies.
Taxonomies represent data dictionaries, that define comonly used financial reporting concepts and define different industries' mandatory.
Each taxonomy includes tags, labels, definitions and references, so that data can be tagged meaninghfully.
registered companies in
Securities in
SBR in
Canadian Securities Agency;
U.S. Securities and Exchange Commission;
Denmark-Danish Commerce and Companies Agency (DCCA)
European Union - European Committee of Central Balance Sheet Data Offices (ECCBSO)
Germany - DeutscheBank, Bundesbank
IASC Foundation published in August 2008 the IFRS Taxonomy Guide, offering assistance in the implementation, application and further development of the IFRS Taxonomy 2008.
The IFRS Taxonomy Guide is targeted at people with a basic understanding of XBRL and familiarity with International Financial Reporting Standards and its interpretations, inclusive of :
preparers and issuers of financial statements who create instance documents;
supervisors, regulators and other receivers who create specific (national and/or business) taxonomy extensions;
XBRL-compliant software developers.
The Guide comprises the following sections
o The IFRS Taxonomy Architecture which describes the technical options that the IASCF XBRL Team chose when building the IFRS Taxonomy 2008;
o The Preparers Guide that helps preparers and issuers of financial statements in dealing with creation of instance documents;
o The Extenders Guide which describes how to properly extend the IFRS Taxonomy in order to make it consistent with future developments with IFRS and XBRL across the world and in various business areas.;
o The Technology Guide provides all technical details on the IFRS Taxonomy, in particular for software developers;
o The Appendices that includes, inter alia, the XBRL fundamentals, a glossary and a style guide.
XBRL - present and future
XBRL is a real opportunity and even we recognize or not, we shall no longer talk about it, because XBRL is broadly implemented.
Convergence to IFRS is a great oportunity, but comparability at global level for financial information may not be easily achieved because:
o IFRS principles have to be very clear specified (at the moment are not specific enough);
o the reporting format for financial statements designed according to IFRS is not unique;
o the accuracy of XBRL documents has to be assured;
o the multitude of jurisdictions and taxonomies need to be tracked and supported;
o a consistent history for financial information has to be created before this changes;
o the reconciliation of financial reports with local financial reporting for tax purposes has to be done.
The mission of XBRL is to provide all financial reporting by companies available tagged as intelligent information, accurate and comprehensive information to the world's business, faster and cheaper, giving a competitive advantage by adding value, linking information to other relevant information .
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