The Future of XBRL

I've been watching the rise of "big data" and have seen analytic tools that are simply mind-blowing. Tools that do not care about the format or content or meta-structure of data, yet can perform analysis across massive datasets, with speed and ease. It has made me think hard about the future of XBRL. 

XBRL has come a long way, from its humble roots to a self-fantasised future of business reporting. Unfortunately, XBRL has, through its life, performed a sort of inverted Moore's Law - doubling in complexity as it doubles in self-proclaimed benefit.

In 2000 someone said that XBRL would be fully implemented 'within a couple of years'. Sadly though, an idea that is a fast approaching it's 15th birthday is now looking like the old dame of an idea - still lingering at the dinner parties, still hoping that the limelight will finally shine on her, still dreaming of the red carpet.

The good news for the old dame is that she has a great future, just as do all those wonderful old black and white films that she was in when she was young, alluring, sexy and oh so much 'the future'.

Her future now is as the example of perfection, to be studied and emulated, even though the 'real world' has long passed her by.

XBRL's place in the future is in the universities, as a tool that can be used to teach students about the fundamentals of business and financial reporting. In an age when we are becoming disconnected from the inner components of the world around us, it is important to have educational tools that require the student to dig deeper than the superficial concepts, and into the nitty gritty of actually constructing financial statements, and the analysis of those financial statements.

The beauty of XBRL for accounting education is that is molds both accounting standards and 'almost' programming. The deconstruction of individual 'facts' and the need to effectively and fully define the 'fact'. XBRL documents are logic puzzles as much as anything else, and the process of construction (and use) of these logic puzzles provides a playful way of learning and exploring financial and business reporting.

But just like the dame's days as the beautiful young star of every screen are well past, so are XBRL's days of being the future of business reporting and analysis.

Maybe it is time for the dame to be a little more graceful, recognize that there are new stars, new methods, and new media. Maybe its time for the old dame to put her skills to use helping ready a new generation of stars.

The alternative is to continue to flash the same old jewelry, the same low cut dress, while continuing to expect the call. The call that will not come.

Syria and Waco

This is a personal editorial comment:

Have you been following the news? Did you know that the government in Damascus is butchering the residents of Waco (oops, Homs).

A few days ago I was told "Its terrible. We must do something about it. We should arm the opposition."

I disagreed. strongly. I disagree not only because intervention will only exacerbate the situation and, if the rebels are successful, lead to a civil war and the destruction of Syria as a functioning state. We already have enough chaos in the middle east, with an unfinished revolution in Egypt, an ongoing mess in Iraq, Libya doing all it can to avoid becoming Somalia on the Med.

So the Syrians a butchering each other again. This really is not new (or news). Syria is a complex country dominated by a 'tribe' (called the Alawites) that make up around 10% of the population. The remainder of the tribal groups have come to accept that, as no single other group could control the country, it is better to accept dominance by one group in exchange for peace and prosperity (of a sort) for the majority.

In the early 1980s, there was a rebellion in Homs against the government in Damascus. That rebellion was brutally suppressed.

In 1993, the United States government suppressed the Branch Davidians in Waco, Texas. 75 people were killed, 25 of them children.

What is interesting is that in both cases, the local opposition to the government was not armed by foreign governments. And in both cases, the 'rebellion' was suppressed and 'peace' was re-established.

What right would any other country have to arm the residents of Mount Carmel outside Waco? None.

What right do we have to arm the rebels in Syria? None.

Was Waco the same as Homs? Of course not. Was Oklahoma City two years later justified? Absolutely not. But it is interesting to understand that Timothy McVeigh considered himself a patriot, fighting against an oppressive government. Am I happy that Russia, Syria, China, Libya, the United Kingdom, France, or any other country did not arm McVeigh and his co-"patriots".

At the same time, what would have been our reaction if the Branch Davidians, or the McVieghs, had been armed by France, or the UK, or Libya or Syria? I would venture to suggest that it would have been seen as an act of war, and a grotesque intervention in the internal affairs of the United States.




Can any of us tell the difference between a Syrian George Washington and a Syrian Tomothy McViegh? I know that I cannot tell the difference. Therefore for me to arm either should be seen as a crime against the government and people of Syria.

We can, and should, say in no uncertain terms that we are repulsed by the actions of the Syrian government against its own people. That where rebellion is suppressed, it should be done only within the framework of Syrian law. Unless or course, the Syrian government has a right to tell other countries what their laws should be.

The Syrian government has the right to suppress the McVieghs, and we have no authority or right to arm them, lest we open the door to others justifying arming "patriots" in Detroit, or Birmingham, or Brussels, or Toulouse (or Waco, Texas).

"La parole est d'argent mais le silence est merde pour XBRL"

So far, the SEC's three year XBRL phase in period has stretched to four years, due directly to the lack of an IFRS taxonomy acceptable to the SEC. It really is a shame, after all, the IASB has had years to produce a taxonomy acceptable to the SEC, yet seems to have failed to do so.

The SEC has just approved the US GAAP 2012 taxonomy, yet there is still no IFRS taxonomy approved by the SEC.

No doubt there are very good reasons.

This must undermine the value of XBRL for analysis of filers. Yet the continued lack of an approved taxonomy for SEC registrants providing 20-F and 40-F filings in IFRS.

Ultimately, this leads to the question - do we need an XBRL taxonomy for IFRS, or should there be a single XBRL taxonomy for SEC reporting, regardless of the underlying standard used for reporting. After all, a 20-F is not an IFRS report, it is a report to the SEC, for use by the SEC and investors.

Couldn't IFRS simply be another entry-point into the US GAAP taxonomy?

Who knows, the SEC might actually be able to then release a single agreed taxonomy for SEC reporting, ensuring that the XBRL filing program gets back on track.

Until then, to alter what someone recently said to me: "La parole est d'argent mais le silence est merde pour XBRL"

30 Days Grace anyone?

Filing day has come and gone, and the number of XBRL filings has, as expected, exploded. But clearly the anticipated 8000+ have not filed. Now the question is: how many companies are availing themselves of the 30-day grace period for first time filers? A question all the 30-day grace filers must ask their vendor: how will their vendor change the vendor's processes to ensure they do not miss the filing date next quarter?

It now seems that up to 45% of year-3 filers missed August 15th filing date and are taking advantage of the 30-day grace period.

That is a significant number of companies, in the thousands, that have yet to provide their XBRL to the SEC. This also means thousands of companies that should be demanding that their vendor clearly demonstrate wat process changes will be made to ensure that do not miss their filing dates in future quarters.

Of course the numbers are evolving quickly, with the 30-day grace period coming to an end next week.