FSA bucks trend and rejects XBRL

HM Revenue & Customs and Companies House are battling to encourage
business take-up of the controversial reporting standard, XBRL, but the
Financial Services Authority has steered clear of the format.

Despite the two agencies forging ahead with schemes to persuade businesses to
file accounts using the data format, previous plans by the FSA to accept filings
using XBRL have remained sidelined due to a lack of interest in its use.

The FSA said it was pointless ‘rushing into’ XBRL filing, but its use would
not be ruled out ‘forever’.

‘We don’t want to end up in a Child Support Agency-type situation where we
charge ahead too quickly with a project,’ a spokesman said.

But following a successful pilot scheme last year, Companies House announced
that ‘several hundred’ businesses were using the format to electronically file
information.

‘We have hundreds signed up at the moment,’ said a Companies House spokesman.
‘We’re quietly confident that it’s working well, and we’re looking to develop
more electronic services in the future, which should make it easier for people
to transact with us.’

The agency has highlighted the XBRL-enabled filing system as a fast and
smooth process that provides acknowledgement of receipt.

HMRC can now take corporation tax filings using the format, and is looking
into creating a less complex scheme for SMEs.

Advisers filing on behalf of clients using the format do not have to fill in
a 64-8 authorisation form, which should speed up the administrative process.

XBRL is a data format that ‘tags’ information, allowing it to be more easily
understood and interpreted by interested parties, such as stakeholders. The
‘tagged’ information is easier to compare with similar data from other accounts.

Despite being hailed as the key to making financial information easily
exchanged and comparable, take-up of the format has been slow.

Industry experts have claimed that XBRL is too complicated, time-consuming
and costly for companies to incorporate in its current guise.

The US market regulator has continued to look into the format, despite little
interest from businesses.

The Securities and Exchange Commission launched a scheme that provides listed
companies with faster reviews of their registration statements and annual
reports, if they volunteer to join a group to test efficiencies of using XBRL.

‘The filers will have an opportunity to share their individual experiences of
preparing, making and analysing their interactive filings, with the SEC,’ said
SEC chairman Christopher Cox. ‘They will also better understand how interactive
data can help streamline their financial reporting process.’