Of course, they need to ensure that they are comparable to their peers in the market place, but at the same time they need to communicate the unique aspects of their business to investors. XBRL lets companies do both and the spirit and the letter of the SEC's draft ruling encourages this mindset.
NEW YORK (PRWEB) May 14, 2008
The announcement marks a significant milestone in the progress of a technology designed not only to simplify business and financial reporting, but also to ensure more effective communication amongst the business and investor community. "Companies need to think about interactive data as a communications tool, not as a compliance burden" says John Turner, CEO of CoreFiling and Chairman of the XBRL International Standards Board.
"There is a natural tendency to panic about a new compliance measure. Companies would be far better served by concentrating instead on the fact that what the SEC is trying to do is ensure that market participants are better informed. Companies should look at this initiative as a new vector for investor communications, not as a compliance measure."
XBRL, or interactive data, is often described as 'barcodes for financial statements', but the gradual shift from paper-based to XBRL-based financial reporting is also analogous to the arrival of digital photography: the same information is being communicated, just in a far more usable format.
"In approaching the SEC's proposals, companies should think hard about how they manage the process of producing their XBRL documents, with direct, unambiguous communication always at the heart of their plans", continues Turner.
"Of course, they need to ensure that they are comparable to their peers in the market place, but at the same time they need to communicate the unique aspects of their business to investors. XBRL lets companies do both and the spirit and the letter of the SEC's draft ruling encourages this mindset."
"XBRL filing is a powerful and individual corporate communication tool that allows companies to disseminate their performance information and convey their investment messages in an extremely direct manner."
"Companies that think about XBRL as a new ally in their investor relations effort will focus on the content of their XBRL "extension" taxonomies – company specific dictionaries that define the unique aspects of their performance story. CFOs and IROs that think about this change strategically will really benefit down the line."
"We encourage companies to learn about XBRL with investors in mind. To help out, CoreFiling's taxonomy builder, SpiderMonkey, which is the platform on which the US GAAP taxonomy was built, is available in a free personal version that lets accountants define company-specific extension taxonomies," concludes Turner.
CoreFiling (http://www.CoreFiling.com) is a privately held company which specializes in XBRL products and consultancy, known for its high quality modelling, data validation and development services. It serves filers, regulators, exchanges and the financial community and is a service provider for US SEC registrants that furnish their financials to the SEC in XBRL format. CoreFiling's major shareholders include Business Wire, the global leader in financial news distribution, a wholly-owned subsidiary of Berkshire Hathaway, and DecisionSoft, the world's premier XBRL components vendor.
Mr Turner, who sits on the Board of XBRL International and Chairs the XBRL International Standards Board is available for media enquiries.