Australia considers mandatory XBRL filing
The Australian Federal Government has released an options paper outlining alternatives for the use of eXtensible Business Reporting Language (XBRL) for financial reporting in Australia, and focuses on the possibility of introducing mandatory XBRL reporting.
The Australian government's existing 'Standard Business Reporting' (SBR) programme already makes use of XBRL for the lodgement of information with various government departments.
Approximately 27,000 public and proprietary companies and registered investment schemes are required to lodge their financial reports with the Australian Securities and Investments Commission (ASIC) directly or, in the case of listed public companies and registered schemes, indirectly through the Australian Securities Exchange (ASX), which forwards them to ASIC.
Currently, financial reports must be lodged either as a paper copy, or electronically using the portable document format (PDF). Entities lodging their reports electronically are also permitted, on a voluntary basis, to lodge financial reports in XBRL format (in addition to mandatory PDF report lodgement). Few if any entities have elected to lodge using XBRL.
The options paper explores various options in the context of both XBRL and 'inline XBRL' (iXBRL). iXBRL is a way of embedding and displaying tagged XBRL financial information in an XHTML document, the universal language for web browsers. It allows data to be presented in a form that is possible to read and understand, either on screen or in printed output.
The options considered in the paper are:
- Option 1 - Mandatory lodgement of financial reports using either XBRL (together with PDF lodgement) or iXBRL (removing the requirement to lodge in PDF or paper format)
- Option 2 - Voluntary lodgement of financial reporting in iXBRL format, replacing the need for PDF or paper format for entities lodging in this manner. Entities not electing to lodge using iXBRL would be required to lodge in PDF or paper format
- Option 3 - Status quo, resulting in no change to existing requirements, i.e. entities could elect to lodge using XBRL but would also be required to lodge in PDF or paper format if they chose to do so.
The options paper seeks feedback on various options without making a recommendation, but notes the particular benefits of mandatory XBRL/iXBRL reporting, including:
- opportunities for businesses and capital markets to share information in a much more meaningful and comparable way, building on the increased harmonisation of global financial reporting and the use of XBRL internationally
- iXBRL being designed for use by both machines and humans, allowing financial reports to be readily understandable to humans and maintaining the basic structure of the report
- allowing Australia to possibly benefit from advancements made during the introduction of XBRL-related technology overseas.
The paper also acknowledges the costs associated with implementation of an XBRL/iXBRL reporting regime, queries which categories of entities should have a mandatory requirement, and debates whether a phased implementation may be preferable.
The options paper is open for comment until 15 March 2013. Click for:
- Press release (link to Australian government website)
- Access to the options paper (link to Australian Treasury website)