At Least Some Companies are Filing in XBRL

Earlier this year Grant Thornton released a study showing that a number of companies were not on track to comply with SEC mandates around XBRL reporting.  A press release from WNS details their efforts to comply ahead of time. 

NEW YORK, NY and MUMBAI, INDIA, Jun 17, 2010 (MARKETWIRE via COMTEX) -- WNS (Holdings) Limited /quotes/comstock/13*!wns/quotes/nls/wns (WNS10.13, +0.17, +1.71%) ("WNS"), a leading provider of global business process outsourcing services, today announced that it has filed an amendment to its Annual Report on Form 20-F for the fiscal year ended March 31, 2010, which was originally filed with the Securities and Exchange Commission on June 15, 2010, for the sole purpose of furnishing the financial statements of this Annual Report in XBRL (eXtensible Business Reporting Language) format. XBRL is a language for the electronic communication of business and financial data, which greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.

"As a foreign private issuer, utilizing XBRL is not yet mandatory for us. However, we have voluntarily furnished the financial statements of our Annual Report in XBRL format this year along with other domestic filers in an effort to meet and exceed corporate disclosure standards," stated Alok Misra, WNS's Group CFO.

The XBRL version of the financial statements of the Annual Report on Form 20-F for the fiscal year ended March 31, 2010, is available on WNS's corporate Web site at www.wns.com, in the Investor Relations section.

It will be interesting to monitor additional companies that file in XBRL and to note those companies that fail to meet the SEC's 2011 deadline.

Mutual Funds Submit Interactive Data to SEC

As I've cited in previous posts, SEC Chair Christopher Cox has been a heavy promoter of XBRL technology, or what he calls "Interactive Data".  It's been slow getting out of the gate.  A trial program to get companies to submit their filings thorugh XBRL only totalled about 30 companies, and most of those, such as Microsoft, have a vested interest in promoting XBRL technology.

An August 21, 2007 press release indicates that some mutual fund companies have begun submitting risk/return data to the SEC through XBRL.  This data will reside in the SEC's EDGAR database and will be available to the public.

An excerpt from the press release:

The Commission voted unanimously on June 20, 2007, to adopt final rule amendments that enable mutual funds to submit risk/return summary information from their prospectuses using interactive data. The risk/return summary at the front of every mutual fund prospectus includes information about a fund's investment objectives and strategies, risks, costs, and historical performance.

All of the new, interactive mutual fund data will be made available to the public on the SEC's online database, named EDGAR, and to subscribers of EDGAR's high-speed data dissemination service. The Commission will monitor how the data can be used to help inform mutual fund investors and will consider whether further steps are necessary to increase accessibility.

Interactive data is powered by XBRL, a computer software language that labels companies' financial and other data with codes from standard lists so that investors and analysts can more easily locate and analyze desired information. The SEC commenced its XBRL Voluntary Financial Reporting Program in April 2005, allowing public companies to voluntarily submit interactive data documents as exhibits to periodic reports and other filings.

Although Christopher Cox and the SEC would like greater enthusiasm for XBRL, this is certainly a step in the right direction.  At some point the SEC may mandate XBRL submissions, but for now companies have the choice to move to XBRL.

SEC's Christopher Cox moves the XBRL ball down field

Marie Leone at CFO.com has an interesting post about the SEC’s Chairman to move to XBRL.  I think she correctly draws the conclusion that it’s only a matter of time before the SEC requires companies to generate and submit their data in XBRL.

Interactive data will clearly help the SEC; however, Chairman Cox is working to develop solutions that will benefit the companies generating the data.  Only time will tell what solutions are developed for the companies themselves, but as Ms. Leone points out, the reasonable conclusion is the the SEC is quickly moving towards the goal of XBRL submissions.  How quickly this will become mandatory is anyone’s guess.

Is XBRL on its way to becoming mandatory?

An interesting article in the May 28, 2006 edition of CFO.com questions if the transmission of financial statements in XBRL is on its way to becoming mandatory.  Up until now, the SEC has asked companies to participate in a voluntary program to submit SEC filings in XBRL format.  At the close of the recent program, only 17 companies had submitted its financials in XBRL.  As the article states:

Last October, SEC deputy chief accountant Andrew Bailey told CFO.com that the SEC might indeed want to make XBRL mandatory. That makes Cox's current campaign sound like a clear message to Corporate America. "It's pretty difficult to see the chairman of the SEC give XBRL that much play and not get the message that this is coming down the pike and it is not going to be optional," says Dan Roberts of Grant Thornton. Roberts is chair of the XBRL-US Steering Committee, part of an industry consortium working to develop XBRL in the United States.

So far, that work has been voluntary — and slow. Although XBRL, which stands for eXtensible Business Reporting Language, has been under development in this country for more than five years, it has yet to have much of an impact on financial reporting. "The United States is, to its potential detriment, significantly behind other major markets in its adoption of XBRL," says Roberts.

Indeed, a pilot program by the SEC to encourage companies to report their financial results in XBRL has attracted only 17 companies. And while International Financial Reporting Standards include a full taxonomy — that is, XBRL tags for all major financial reporting line items — the tags for items involving U.S. generally accepted accounting principles are still being written. By some counts, that project, which includes some 3,000 tags, is less than half complete.

Based on these comments, it appears that companies ignore to the move to XBRL at their own peril.