New Zealand is to host an international conference on an XML-based business reporting language in May, an event some in the accounting profession hope it will be an impetus for further adoption in this country.
“With business reporting, there are frustrations on the accounting side, with it being hard copy and paper-based,” says Mark Hucklesby (pictured), national accounting director for Ernst & Young.
The frustration experienced by those seeking information from the figures can be alleviated by XBRL, he says.
“It’s a mediation language and allows users to push information out and bring it into their business with a minimum of re-work.”
XBRL’s origins go back to 1998, when the American Institute of Certified Public Accountants began work on developing an XML-based financial reporting tool. Initially named XFRML, the emerging language’s name was changed to XBRL in 2000 and since then XBRL International, also known as the XBRL Consortium, has grown to include 200 software vendors, financial institutions and other interested parties as members.
New Zealand’s XBRL body, XBRL-NZ, was formed in 2002 and New Zealand had input into the development of the latest version of XBRL, specification version 2.1.
XBRL, a royalty-free, open standard, works by way of meta-tags, like XML.
“When you have financial information and tag it up, it gives you the chance to fully and openly exchange what’s going on.”
A company required to file reports to its board, the IRD and NZX (formerly the NZ Stock Exchange) is supplying different streams of information, “but when you look at it, there’s a lot of information that’s common to a lot of users. You can identify the shared information, put a tag around it and then it can be freely shared.”
Using XBRL, a revenue figure could be directly reported to NZX, which could then send it direct to the Statistics Department for use in its annual enterprise survey.
That is what is being worked towards under Project First Step, an NZX and NZ Institute of Chartered Accountants initiative that is aiming at getting companies to file their NZX Appendix One form using XBRL.
Work is also being carried out on enabling the Statistics NZ Enterprise Survey form to be filed via XBRL. The advantage to companies is that the Stats NZ requirements cross over with the NZX ones, potentially eliminating a lot of work.
XBRL is also in use at Auckland University, where an XBRL-based application, Leap+, gives online access to information on GAAP, a series of global accounting principles.
Hucklesby says overseas implementations include Microsoft, Reuters and US investment bank Morgan Stanley, all of whom file some data with the US Securities and Exchange Commission in XBRL form. XBRL is used by banks and insurance companies reporting to the Australian Prudential Regulatory Authority.
Overall, XBRL allows faster, cheaper, better exchange of business information between those who need it, Hucklesby says.
Accountants need to know a bit about technology, with the tags and CIOs need to appreciate what the accountants are trying to do.”
The 9th international XBRL conference, which takes place in Auckland from May 9 to 14, will be the first to be held in New Zealand.