How To Make Your Data Interactive – Strategic Finance, XBRL Column, March 2009

My March 2009 XBRL column in IMA’s Strategic Finance magazine discusses the possible strategies available for companies to comply with the US SEC XBRL mandate, and in general with XBRL filing requirements all over the world.

In brief:

Thousands of companies are now facing choices in terms of how to add XBRL report-creation capabilities to their systems: What does adoption of XBRL entail? How do I convert my SEC filings to the Interactive Data format? What are the possible approaches to XBRL-enabling my corporate processes and systems that I should be aware of, and what are the related costs and benefits?

For companies considering their response to the immediate requirements of the mandate, there are several solutions. Some appear simple and straightforward, like the conversion of the reports to XBRL after they are generated in a traditional format, such as Microsoft Word or Excel. The conversion can be outsourced, or it can be performed internally using an XBRL mapping and instance creation application.

But these “bolt-on” solutions, that also happen to be the most publicized and commonly suggested, merely serve as a patch on a more complex problem. Other approaches might involve more work at first, but they can decrease the cost of complying with the mandate as well as the costs of other existing consolidation, management reporting, and compliance processes.

The same features that make XBRL the technology of choice in regulatory filings and compliance can be leveraged by companies for even greater benefits related to systems integration, data consolidation, internal reporting, and auditing. Many executives may see these as longer-term concerns that are not worth addressing when the immediate priority is compliance with the SEC mandate, but the decisions made today about how to react to the mandate are crucial. It is a fact that a “bolt-on” response to the SEC year-1 requirements will not be efficiently scalable to year-2 requirements and beyond. And with IFRS convergence just around the corner, now is the perfect time to consider standardizing your internal reporting supply chain.

The complete article is available at the IMA website (IMA members only).

Also, Iphix is organizing two workshops where I will discuss these same topics, the options available and the tools and resources required to decide the best ways to get the most benefit from Interactive Data. Stay tuned for more information and dates!