Announced: Seahorse® is the T4U Successor

After the recent EIOPA announcement that the XBRL reporting tool T4U will be decommissioned next month, many filers are now looking for a quick solution to keep their submissions compliant.

At CoreFiling, it’s our business to keep you compliant – that’s why we are proud to announce that we are offering a free trial to our cloud-based regulatory filing platform, Seahorse®. The successor to T4U.

This free trial gives you the opportunity to create one complete filing to submit to a regulator – and even better, users will have three months to explore the software before submitting their filing. Here are just some of the ways in which Seahorse® can help your organisation:

The Benefits

  • Seahorse® lets you create fast, error-free XBRL filings. Unlike T4U, its data rendering is XBRL-based, so the reports you send will never have data conversion errors or approximations. The data is 100% accurate every time.
  • Seahorse® is hosted in the cloud. Its architecture lets you update taxonomies instantly, with no tedious installations. You can create and view your filings anywhere, any time.
  • Seahorse® allows you to easily create XBRL filings in the familiar environment of Microsoft Excel.

How do I sign up?

Trial access is available to anyone. To claim your trial, simply visit our website and fill out the sign up form.

XBRL accounting taxonomy design and categorisation

1. The future of taxonomy design

This is the first in a series of articles in which I propose a novel categorisation of accounting taxonomies based on three aspects of taxonomy design: Architecture, Coherence and Extensibility.

In this first overview article I will introduce the three design aspects. In future articles I will cover these aspects in more detail and examine how they apply to the US GAAP, IFRS and UK FRS taxonomies. The series will conclude with a discussion of how I’ve categorised these taxonomies and how this categorisation might inform the current direction of taxonomy design.

2. Why are taxonomies so important?

XBRL taxonomies are the key components of any electronic financial or business reporting system. An XBRL taxonomy is the formal definition of a financial or business reporting vocabulary for a given jurisdiction or reporting domain, imparting meaning to the concepts which describe the facts being reported and providing a framework within which reports are structured. It defines, the “contract” between reporter and regulator.
Just as importantly, it defines what is not permitted, except insofar as “locally negotiated” extensions allow. A taxonomy also defines relationships between reporting concepts, meaning that the “contract” not only defines the reporting vocabulary (the “what”) but also the grammar (the “how”) – how reported concepts can legitimately be combined and related to each other.
It is for these reasons that taxonomies matter in an electronic world. They are fundamental to any financial or business reporting regime and their design exerts a direct influence on the capabilities and expressive power of reporting and analysis tools.
XBRL tools and technologies are still evolving to suit the market’s needs. Experience has shown that deploying XBRL solutions takes a considerable amount of time and effort, and a large portion of this is invested in taxonomy design and development. Taxonomy authors are continually developing new ways to address the complex challenges of financial and business reporting.
It’s clear that XBRL taxonomies are currently undergoing a period of rapid evolution as they colonise a number of new financial niches, with new taxonomies building on the successes – and avoiding the perceived failures – of previous generations. I’m proposing the establishment of a new classification system for taxonomy evolution, with the hope of illuminating the future of taxonomy design.

3. Taxonomy evolution

In the family tree of taxonomies, those concerned with company financial statements can be broadly classified according to three key aspects. This has resulted in taxonomies that can be classified as belonging to one of three generations.

3.1 Aspects of taxonomy design

3.1.1 Architecture

Some taxonomies model the applicable accounting or financial standards; some model the required reporting documents; and some model the underlying data.

3.1.2 Coherence

‘Coherence’ is the degree to which a taxonomy “hangs together” and permits the creation of a body of instance documents that are consistent and comparable. At one extreme some taxonomies give the freedom to combine reportable concepts with any dimensions and to combine dimensions freely. At the other extreme such combinations are carefully controlled by the taxonomy.

3.1.3 Extensibility

Some taxonomies are very permissive when it comes to extension, to the point that “anything goes”; some taxonomies provide specific extension points so that extension can be controlled, if not actually defined; and some taxonomies provide specific mechanisms to support extension.

3.2 Taxonomy classification

3.2.1 First generation

First generation taxonomies are literal interpretations of accounting or financial standards, where the filer can do pretty much whatever they please with the base taxonomy, and any additional structured information can be captured as a privately-defined but uncontrolled extension.

3.2.2 Second generation

Second generation taxonomies model not the accounting or financial standards themselves but the regime’s required document structures derived from the applicable accounting or financial standards. Additional structured information can be captured in a private extension that should follow certain rules or guidelines laid down by the taxonomy author.

3.2.3 Third generation

Third generation taxonomies move away from an architecture derived from the accounting/financial standards or reporting document structures and instead simply model the data within the taxonomy. Additional structured data can be captured by ‘extension’ mechanisms built in to the data model of the base taxonomy itself.

All three generations exhibit convergent evolution in that they all provide a document-oriented browsing and presentation view that will be familiar to preparers and accountants, but each is derived in a fundamentally different way.

4. A new taxonomy classification system

The key taxonomy design aspects that categorise taxonomy evolution are summarised as follows:

Taxonomy Classification

5. Next article

In the next article in this series I will discuss the Architecture aspect of taxonomy design in depth, with reference to the US GAAP, IFRS and UK FRS taxonomies.

I would like to also thank Andy Greener for his contributions.

Who helps when your COREP submissions fail?

The market is rife with vendors offering ‘inexpensive’ solutions to the imminent problem of filing COREP disclosures to National Competent Authorities around Europe.  In particular, smaller firms with relatively straightforward needs may be tempted by the promise of ‘cheap and cheerful’ products.  Creating the XBRL documents is a fairly simple process, but organisations should think through the wider issues.  Licensing the right application will not be enough, whatever your vendor tells you.

Many regulators are still finalising their reporting rules, but even at this late stage the EBA’s guidelines are quite likely to change before the due date for the first submissions.  Some vendors will struggle to cope when the regulatory requirements change, not only before the initial filing date, but when further alterations occur, as they will surely do over time.  To what extent do vendors really understand the implications?  How quickly can they react to ensure that fully compliant XBRL is generated?  What happens if things go wrong?

Proven XBRL expertise is vital, especially at the service level, if vendors are to overcome any problems encountered by their clients.

What makes CoreFiling different?  We have been developing XBRL products and offering expert XBRL consultancy for well over ten years.  CoreFiling are the firm that provides XBRL support to many of the world’s leading integrators and consultancy firms.  Our expertise is built on a deep understanding of the XBRL standard.  CoreFiling are active contributors to the XBRL consortium that oversees the XBRL specifications; the company undertook most of the work in developing the key technical specification behind Eurofiling.  This affords us deep insight into the standard and informs our products and services.

Seahorse®, available via key CoreFiling partners, provides a straightforward, Excel-based solution for COREP, FINREP and Solvency II filing.  However, behind Seahorse lies over 200 man-years of intellectual property and proven expertise.

You may be thinking that Seahorse sounds fine for smaller organisations, but what about larger financial institutions with more complex needs?

More in a few days’ time…

Beer from Munich

A month has passed since the Munich XBRL conference and for some reason the slides have not yet been posted. I’ve had a few requests for my talks, so here they are.

Michael Ohata and I gave a joint talk about XBRL International, with my section on the background to and current priorities of the Standards Board. I’m going to write some more about that elsewhere in the near future, but for the moment, here are the slides (PDF).The bottom line is that while we have a terrific community, we still need more volunteer experts who are responsible for XBRL technology inside their own shops, simultaneously working inside the consortium to help improve the level of testing and review that is conducted on modules that cover requirements such as versioning, formula and rendering.

Ralf Frank (who is the very articulate MD of the DVFA) and I co-chaired a day and a half long session on External Reporting. The track brought together professionals that work with business reports from a number of perspectives (exchanges, analysts, infomediaries, credit ratings agencies and the audit profession). I spoke about managing expectations in an XBRL-enabled world. Today the first thing that investors see (and that the entire process is geared around) is EPS. The day you get an entire earnings release marked up in XBRL you can do a lot more analysis than has ever been possible in the past. Sorry about the lack of beer – but I got your attention, didn’t I? Drop me a line if you want to discuss, disagree, or explore.

The future for European tendering looks BRITE

Great presentation and demonstration from Piero Milani from Infocamere about BRITE, which is an EU funded effort to bring the Business Registrars of Europe together. The mission is to establish a framework for the interoperability between the Business Registration Authorities of Europe.

The project that Piero was talking about is a pilot that they have developed with the assistance of Adobe. Full disclosure: using CoreFiling technology to make the XBRL part happen. The problem that Piero and his colleagues have been tackling is to do with government and local authority procurement. One of the requirements in most official tenders is for tenderers to provide proof (available only from their company registrar) that they have the appropriate legal standing and, further, that they have a certain amount of revenue or assets available to them.

The problem is that there is a different company registrar in each of the 27 states (that’s countries for our North American readers) of the European Union. And something like 18 official languages. So how does a company in Sweden bid for work in Italy and not be indirectly discriminated against, because the government agency in Italy doesn’t know anything about the legal situation (or the language) in Sweden?

Their proof of concept (covering 5 countries at present) is a good example of collaboration and a great example of the type of problem that interactive data, supported by agreed and well-defined metadata can solve. And this is a very different environment to the typical XBRL examples you’ve probably heard.

A number of company registrars across Europe, including in Italy, are mandating or offering a mechanism to allow small companies to file their accounts in XBRL. Companies House in the UK have received more than 100,000 such filings in the first year of the operation of their system to accept XBRL-based e-filings.This pilot leverages the availability (or future availability) of that information.

So the BRITE pilot allows a company tendering for some work in a different part of Europe to apply to their own company registrar for a statement about their finances and legal standing. The BRITE mechanism uses an agreed vocabulary (and a single PDF document) that gets filled in by the home company registrar, for provision to the government agency that is running the procurement.

The PDF contains summary information (with labels available in the language of the procuring agency) as well as an official extract from the registrar’s system, proving the legal standing. In addition (this is the really good bit) they provide an extract from the XBRL filing that the tendering company has made and provide that in a read-only form in the PDF. So turnover, profit, assets etc are set out in the form. Click on a drop-down and you can change the language of the labels. Click a button and you can extract the data out in XBRL format.

Simple. Compelling. Solves a problem that exists today. More power to the BRITE project. Congrats!

Free SpiderMonkey. Like Beer.

Yesterday we released a free as in beer, no licencing restrictions copy of our fully featured XBRL taxonomy development platform. Yes folks, SpiderMonkey Personal Version is available for download now. Read the press release here.

Why would we do that? It’s user friendly. It lets users make it easy to build complete, multi-lingual taxonomies. It is full of features that make life easier, including capabilities to unify, or de-duplicate reporting concepts. It’s based an the Eclipse Rich Client Application, and our True North validation and processing engine so it’s rock solid. It’s a great way not just to learn about taxonomies and XBRL in general, but as *the* tool of choice for that task. And we are giving it away?

Well, we are genuinely committed to making sure that XBRL gets adopted right around the world, so this should help out.

We also believe that folk that need a bit of extra help will buy the Professional version from us, in order to get full support, or, for larger operations that need multi-user features and all of the comfort, reporting, audit trails and power that is offered by the Enterprise Version. So this move is not completely altruistic. But I did mention that it’s free, right?

See you in Munich!

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.

Disclosure… auf Deutsche

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.

MicroXBRL anyone?

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!