Regulatory authorities around the world have adopted rules requiring companies to provide their financial reporting in a structured data, machine-readable format i.e. eXtensible business reporting language (XBRL). This will enhance the analytical process by opening access to more and more data than earlier ever.

XBRL filing aims at enabling the investors and analysts to capture and analyse information more effectively, as well as help the companies automate their financial report filings with the Regulators. Unfortunately, XBRL has not achieved its true potential for either investors or companies.

Misconceptions regarding the compliance costs of XBRL are widespread. Companies see XBRL filing as a compliance burden and a cost center. The costs that companies, large and small bear in preparing and filing their financial information into XBRL format are largely dependent on how Companies financial executives view XBRL mandates: as a simple compliance requirement (Outsource Services) or as a business report filing considering XBRL document as their financials (In-house process).

Mostly, Companies rely on the Outsource Services for filing of its financial reports and information into XBRL format. This leaves no room for the reporting companies to utilise XBRL as a communication tool. Cost reductions can be achieved by bringing the structured reporting process in-house and starting the financial reporting tagging within the companies from the beginning of the report-assembly process.

In the US, Financial Executive International (FEI), citing complaints raised by its members requests the Securities and Exchange Commission (SEC) to make changes to XBRL requirements in the following areas:

• Limit the amount of tagging of footnote details
• Exempt wholly-owned subsidiaries from any detailed tagging requirements
• Allow XBRL-tagged information to be submitted after the standard financial filing
• Begin a project to develop a single filing that incorporates XBRL-tagged data

FEI is sharing the members’ concern with SEC hoping that such discussions will lead to improvements to all aspects of the XBRL reporting process. The Regulators should build tools that help businesses to maximize the efficiency of their internal processes with an eye toward reducing the overall time and cost of the data management workflow with a means to take a proactive look at the way Companies manage its data.