Speaking of Germany, I’ll be back there in a couple of weeks… will you? Have you registered for the 15th XBRL International Conference? I’m involved in the External Reporting track running over Tuesday afternoon and Wednesday (5-6 June). Lots of good speakers, a great panel session and real focus on the challenges and opportunities created for today’s external reporting professionals. Hope to see you there.
Oh yes — and some very cool stuff from CoreFiling.
I was on a panel session at DIRK (the German Investor Relations Society) in Frankfurt yesterday. We were talking about ways and means for German companies to attract international investors, debating a set of thoughtful, and not entirely uncontroversial theses developed by Ralf Frank, the MD at DVFA.
Stefan Jekel, from NYSE, had a great analogy. He made the point that better reporting leads to better liquidity and greater market capitalisation, and had the academic research to prove it. But you don’t actually need all the equations. Stefan points out that to see "information asymmetry" at work, just head on down to your local used car lot. The more information, and more certainty you have about a car, the more you are likely to pay. Simple, but true. Millions of people prove that on Ebay everyday. The auctions that boast context, features, history and explanations do better, for otherwise identical items, than those with the bare necessities.
A good question posed after the session: "If XBRL can help analysts build faster, better and deeper models, and regulators can use it to drive convergence projects that bring accounting rules closer together, why isn’t everyone using it already?". My answer was three-fold: Education, Education and Education. The "enlightened self-interest" required of companies and account preparers to go to the (fairly small, in real terms) effort of publishing XBRL versions of their accounts is logical, but needs people to think at least one step beyond their own outbox.
True, it’s the analysts, bankers, regulators and counter-parties that are the initial beneficiaries of XBRL formatted disclosures, but (a) preparers don’t just produce accounts for publication because the law says they have to, they also produce them in order to gain access to capital; and (b) corporates that have started to think about XBRL in terms of improving the internal reporting and consolidation process quickly understand that the same issues exist outside their own organisational walls.
An interesting day. Thanks to Susanne Minneker and DIRK for bringing the panel together.
You might be interested in looking at, or contributing to, our MicroXBRL wiki.
There have been discussions about rendering around the XBRL consortium for many years and now, inside the consortium, there is an effort to capture them. The problem, from our perspective, is that accountants and report preparers need to be able to make their reports look exactly the way *they* want them to. Providing an XBRL data file together with a file containing a range of rendering metadata isn’t terribly attractive either to the preparer, or to the software vendors that have to support them. So instead, drawing on the ideas of the folk over at Microformats.org as well as the SVG
group (including Jonathan Watt) we are experimenting with a much more direct approach. Publishing XHTML files that render the report the way the user wants, and embedding XBRL tags right inside those files. It’s simple. It meets the major user requirements. It can probably be extended to allow fancier requirements to be met as well. Your input is welcome!