Views on improving the integrity of global capital markets
13 July 2011

Unlocking the Investor Benefits of XBRL

Several years ago, when then-Chairman of the U.S. Securities and Exchange Commission Christopher Cox advocated for the required tagging of financial disclosures by U.S. companies, both large and small investors were perceived as the main beneficiaries. That’s because the envisioned interactive data format would allow investors easier access to the data traditionally locked in paper filings. Since that time, unfortunately, most of the software development efforts have focused on the creation of tagged reports to meet various regulatory requirements.

A contest introduced by XBRL US is expected to change that. The competition, dubbed the XBRL Challenge, looks to increase the pace of developing new XBRL applications that benefit investors and others looking to access the information within tagged reports.

The XBRL Challenge allows individuals or firms to submit an “open source” analytical product for review by a team of judges for a top prize of $20,000. The requirement of an open source format — or one that is readily available to the public — should serve as the foundation for the continued development of usage-based XBRL products. The XBRL US site provides links to some existing XBRL consumption products as a reference to guide participants in expanding the capabilities currently available.

For its part, CFA Institute continues to support the advancement of XBRL reporting. While the benefits and challenges presented in our 2009 guide for investors remain applicable today, the number of companies around the world delivering tagged reports to their regulators continues to increase. The potential for new applications to tap into these resources represents the next horizon for the growth and acceptance of this reporting standard. “We want to foster the development of a wide variety of innovative applications that will show the power of XBRL tags to deliver insights that are currently locked away in financial filings in basic text or PDF format,” states John Rogers, CFA, president and CEO of CFA Institute, one of the contest sponsors.

The goal of XBRL US, through the XBRL Challenge, is to provide opportunities for investors to discuss their product expectations with those developing applications. If the data released by companies serves as the foundation of your analytical processes, this is your opportunity to have an impact — including on the amount of time you spend manually re-keying that information. In other words: Invest some time today to save some time tomorrow.

About the Author(s)
Glenn Doggett, CFA

Glenn Doggett, CFA, was a director of professional standards for CFA Institute. His responsibilities included providing member guidance in applying the ethics and standards of practice policies, supporting related educational and public awareness activities, and working with the Standards of Practice Council of CFA Institute on its initiatives. He was a co-host of the free, live, interactive webinars used by CFA Institute to promote ethical decision making and global best practices. Previously, Mr. Doggett, as a member of the CFA Institute Financial Reporting Policy Group, represented membership interests regarding reporting and disclosures initiatives, including XBRL. Prior to joining CFA Institute, he worked in the financial information sector with SNL Financial, where he focused on the real estate and energy industries, directing the development and maintenance of a financial data storage system. Mr. Doggett holds a BA in economics from the University of Virginia. He was awarded the CFA charter in 2006 and is a member of CFA Society Virginia.

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