XBRL Project - B&B Soft

Is it possible to develop new XBRL taxonomies to improve the communication of financial data be-tween companies and governments?

This question entirely guided the XBRL project realized with the CRO funding, part of the FESR (2007-2013) with the support of the EU, the Italian State and in particular the Veneto Region and in collaboration with Corefiling, a software house based in Oxford (UK) and specialized in XBRL.

The aim of the project was to conduct a comparative analysis of XBRL technology in Italy with the most advanced nations in the use of the same: Holland, United Kingdom and United States.

THE XBRL PROJECT
THE UNITED KINGDOM
THE NETHERLANDS
THE UNITED STATES

As of 2010 in Italy is mandatory to file financial statements in XBRL with the relative notes.

Before explaining the approach of each country, we’ll briefly explain what is XBRL.

XBRL (acronym of eXtensible Business Reporting Language) is a language based on XML, and it is mainly employed for the communication and the electronic exchange of financial information.

The creators of XBRL defined a series of specific tags for each concept appearing in the statements so as to each one corresponds a specific budget item, that permits to a specific software to use these matches.

Afterwards, they organized these tags in taxonomies – data dictionaries that define the several concepts in the balance sheet items of various companies.

Every taxonomy includes tags, definitions and references so that data are marked with a specific meaning.

Specifically, we focused on the fiscal domain. Starting from IRAP and IRES 2014 forms iXBRL and from the filing procedure established by the Italian income revenue authority, we have analyzed the tracciato record employed for the importation of statements in the software and consequently created a taxonomy, inclusive of the fiscal forms and other elements from the IT-GAAP taxonomy.

Furthermore, we have added specific elements from the fields already present in the statements. Then, we have created several examples of annual reports, in InLine XBRL format, in relation to fiscal statements.

The project proved a useful occasion to envision a possible widening of the XBRL technology applications, and gave us the possibility to verify that such technology actually bears all the potentialities that are already exploited in the strongest countries of the international market.

In the UK, companies, banks and government agencies are provided with the XBRL support as in the United States. In particular, XBRL is employed for the filing of fiscal information at the HMRC (Her Majesty’s Revenue and Customs) and for the voluntary filing of the annual reports at the Companies House for an amount of 2 millions reports every year.

The UK has created and developped Inline XBRL as the standard for the presentation of financial data with XBRL. This allows the presentation of documents in readable versions, in (X)HTML format, with embedded XBRL tags. These tags are usually not visible to the human eye but can be visualized according to need with a suitable software.

Another aspect deserving a mention is the use of XBRL in the fiscal domain. The UK has created a taxonomy for the filing of financial documents, called DPL (Detailed Profit & Loss). The taxonomy is available in three versions in order to suit the tax return filing procedure defined by the UK.

To visit the English organization website, click on XBRL UK.

With the implementation of the Dutch Taxonomy Project, that was launched in 2004 for the lightning of the administrative processes, the NTP (Dutch Taxonomy Project) created a XBRL taxonomy that allows businesses to produce financial information for governments straight from their databases, and to use such information in a safe and efficient way.

A crucial aspect in the new taxonomy is the simplification of the interface for statistical data storage.

As of 2015 some banking institution such as ING facilitate the filing in XBRL to their customers.

The Danish approach has been adopted by the Australian government in 2006 with the starting of the SBR (Standard Business Reporting) project for the regulation of the financial processes known internationally.

Visit the website of the Dutch SBR organization SBR Olanda.

The United States have always fostered the adoption of the XBRL language and they are currently registering extremely high numbers of filed instances in compliance with this standard.

The XBRL technology was conceived by a team of expert accountants and computer engineers who presented their idea to the American Institute of Certified Public Accountants (AICPA).

Today, in the US, apart from being used for statement filings, the XBRL language is frequently employed in the communication between government agencies and companies.

Even the SEC (U.S. Securities and Exchange Commission), the American federal agency in charge of monitoring the stock exchange, similar to the Italian Consob, in reaction to a campaign against XBRL mandatory, has declared in front of the Congress that fostering the exemption from XBRL would cause considerable damage to investors. In other words, the exemption from XBRL usage would impede research and the dynamic analysis of financial data. Not to mention that the comparison of financial data between companies would become impossible.

President White has confirmed that his agency (SEC) is considering the adoption of Inline XBRL for consolidated financial statements.

With this format, public companies will be able to file a single version of each financial statement, that will be readable by both men and computer systems, consequently substituting the current system that requires the filing of two versions for each statement (a .doc version and an XBRL one).

Visit the website of the American organization XBRL US.

Is it possible to develop new XBRL taxonomies to improve the communication of financial data be-tween companies and governments?

B&B Software

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