Robert Kugel's Analyst Perspectives

Public XBRL Vendors Should Go the Extra Mile

Posted by Robert Kugel on Mar 27, 2013 8:02:00 AM

This is annual report season, the time of year that a majority of European and North American corporations issue glossy paper documents aimed at investors, customers, suppliers, existing and prospective employees as well as the public at large. (Some countries have different conventions; in Japan, for instance, most companies are on a March fiscal year.) In reviewing some of the annual reports that are available on the Web, I was struck by the absence of advanced reporting technology used on investor web pages and in online annual reports of vendors of advanced reporting technology. (One notable exception is Microsoft, which uses Silverlight on its investor web pages.) Adobe Acrobat (introduced 20 years ago) is the presentation method of choice for the annual report. It would be great if publicly traded vendors that sell tools that automate the process of assembling investor documents (such as Exact SoftwareIBMInforSAP and Trintech) would demonstrate their value beyond simple compliance. These companies’ tools support and automate the processes that are part of what some call “the last mile of finance,” referring to their use in the final steps of a stream of activities that starts with closing the books and performing statutory financial consolidations and ends with publishing and filing financial documents to satisfy regulatory or contractual obligations. (I prefer to use the term “close-to-disclose cycle” because it’s a more accurate description.) These vendors should go the extra mile and redesign their investor sites to show how XBRL-tagged financial documents can be used to communicate more effectively with shareholders.

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Topics: extended close, tagging, US-GAAP, XBRL, Analytics, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), CFO, compliance, Financial Performance Management (FPM), financial reporting, SEC, spreadsheet

Make XBRL Data from EDGAR More Accessible

Posted by Robert Kugel on Mar 7, 2013 7:46:46 AM

I was discussing the United States Securities and Exchange Commission’s (SEC) eXtensible Business Reporting Language (XBRL) mandate with a former head of investor relations at a Fortune 100 company. His take on it is much the same as that of everyone else involved with corporate reporting: it doesn’t produce much value and costs a bundle to comply. I related to him my thoughts on the lack of progress I saw in making the XBRL mandate more useful to corporations and investors alike. Making XBRL data readily available to the public – not just for SEC enforcement purposes – is consistent with the SEC’s three-fold mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. In addition to giving XBRL-tagged data greater practical value to investors, the trove of company data assembled by the SEC could be used by a wide range of people working within corporations.

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Topics: Reporting, extended close, tagging, US-GAAP, XBRL, Analytics, Accounting, Business Performance Management (BPM), CFO, compliance, Financial Performance Management (FPM), financial reporting, FPM, SEC, spreadsheet

Happy Birthday XBRL

Posted by Robert Kugel on Feb 8, 2013 8:44:59 AM

To mark the fourth anniversary of the Securities and Exchange Commission’s (SEC) interactive data mandate, Columbia Business School (my alma mater) and its Center for Excellence in Accounting and Security Analysis (CEASA) published a review of the current state of eXtensible Business Reporting Language (XBRL) that notes the manifold issues that plague this promising technology. From its perspective, three key issues hamper greater use of XBRL. The first is the high error rate in the tagging process and the tendency of companies to use too many non-standard tags, both of which substantially reduce the usefulness of the data to practitioners. Second, they believe technologists, not regulators and accountants, should be more involved in developing software that makes it easier to consume XBRL-tagged data. Third, companies should spend more effort improving the quality of their data than on trying to kill the mandate.

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Topics: extended close, tagging, US-GAAP, XBRL, Analytics, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), CFO, compliance, Financial Performance Management (FPM), financial reporting, SEC, spreadsheet

Full Use of XBRL Is Not Here Yet

Posted by Robert Kugel on Apr 12, 2012 11:01:53 AM

The mandate by the U.S. Securities and Exchange Commission (SEC) that requires its filers to apply eXtensible Business Reporting Language (XBRL) tags to their financial statements has been in effect for several years. (XBRL is a core element of our Office of Finance Research Agenda for 2012.) One of the most important ideas behind this “interactive data” requirement was to make it as simple as possible for investors to be able to consume and analyze corporate financial data filed with the SEC. This intent sets the SEC mandate apart from most other XBRL tagging requirements, which are designed for the needs of regulatory bodies such as the Bank of Japan, the Australian federal and state governments and the U.S. Federal Deposit Insurance Corporation (FDIC). Moreover, I believe the depth and breadth of the SEC’s database and the size of the U.S. equity capital markets make this the most important public-focused use of XBRL in the world. Considerable progress has been made toward the main objective, but considerably more is needed, and the sooner the better.

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Topics: extended close, tagging, US-GAAP, XBRL, Analytics, Business Analytics, Business Collaboration, Governance, Risk & Compliance (GRC), Accounting, Business Intelligence (BI), Business Performance Management (BPM), CFO, compliance, Financial Performance Management (FPM), Information Applications (IA), Information Management (IM), financial reporting, SEC, spreadsheet