Treasury tips $4m more into XBRL effort

The long road to XBRL adoption

XBRL was conceived by US accountant Charlie Hoffman in 1998 but was slow to catch on owing to the complexity of getting so many groups to collaborate to build the standard's foundations.

In Australia, it has long been promoted by XBRL Australia, a member of the international advocacy group, established in 2002 with a $160,000 grant from the defunct National Office of the Information Economy.

Pyman said the Government's involvement had short-circuited the "chicken and egg" scenario, in which developers wouldn't use the standard until there was enough demand for it.

He predicted economic growth would flow from investors and day traders accessing standardised "streams" of financial data that reduced risk.

And he warned investors to be wary of companies that chose not to use the transparent XBRL standard.

"This is a tool that allows transparency," Pyman said.

"If you want transparency you use the tool and if you don't want transparency you won't.

"That says something about you and you might find investors tend to shun people who make it hard for them to investigate [their businesses]."

The Australian Government project is voluntary, unlike a compulsory scheme set by the US Government Securities and Exchange Commission (SEC) which requires 500 companies and mutual funds with market capitalisations in excess of $US5 billion to tag their financial data. In time, the SEC will place these same requirements on smaller US businesses.

This requirement was introduced when the SEC moved from its Edgar forms-based electronic filing system, to IDEA, an interactive disclosure system based on XBRL.

In a 143-page proposed rule filing, the SEC said XBRL filings made financial information easier for investors to analyse, automated regulatory filings, sped accurate information transfer and disclosure and would "eventually reduce costs".

A practical goal was to help the commission more speedily investigate the sorts of illicit backdating and share trades that caught short the likes of Apple chief executive officer Steve Jobs, Brocade, McAfee and Research in Motion (RIM) executives.

In September, 2007 the SEC finished work on 12,000 tags that defined the generally accepted accounting principles.

Madden said groups in the two countries were working to make their respective taxonomies compatible for easier cross-border sharing of information.