Monday, August 3, 2020
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XBRL Guides Regulators Building Financial Data Standards Programs

XBRL confirmed this week the publication of the Taxonomy Development Handbook, a guide for regulators, industry experts, and businesses to building data standards that are easy to implement and that produce data that is easy to consume. A taxonomy is a digital dictionary of terms representing the single source of the data model for regulatory reporting requirements. According to XBRL US, XBRL is an open, nonproprietary data standard used by U.S. regulators including the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Energy Regulatory Commission (FERC).

The group says the Handbook was developed over a two-year period through the work of the XBRL US Domain Steering Committee, a technical member working group of accountants, software providers, and academics. and is an in-depth roadmap to building effective data standard reporting programs. “It covers the fundamentals of the XBRL specification, and best practice in establishing a governance structure, assessing project scope, creating an appropriate data model to support reporting requirements, the mechanics of building the taxonomy, and documenting the program.” Readers can access the Taxonomy Development Handbook here. 

Additional guidance previously prepared by the Committee, which is designed to be used along with the Handbook, include the XBRL US Style Guide, covering naming conventions for XBRL labels and concepts; and Taxonomy Approval Metrics, standards for the development of XBRL taxonomies and supporting materials, which are used in the XBRL US Taxonomy Approval Process.

“The XBRL community is dedicated to supporting regulators and businesses that are considering, or have already chosen to adopt the XBRL standard, said Scott Theis, CEO of Novaworks LLC, and Chair, XBRL US Domain Steering Committee. “Many U.S. regulators have adopted XBRL, and it’s used even more broadly in non-U.S. markets. The experiences and learnings collected through these various programs have been distilled into a readable guide and reference for U.S. regulators,” Theis continued.

Theis said that, up to this point, the XBRL information available to developers and data analysts has been highly technical and spread over a lot of different documents. “The Taxonomy Development Handbook brings all this information together in an easy to follow guide with examples, plenty of reference material and crosslinking,” he added.

Globally, the XBRL financial data standard is used in programs including: 82 financial regulatory, 52 capital markets (public companies), 18 business registrars, nine tax authorities, five government oversight, and two Standard Business Reporting (all businesses and governments report in a common standardized format). This year, the European Securities Markets Authority (ESMA) has initiated requirements for the use of XBRL by companies in every European Union country.

“This has been a significant effort undertaken by our members in the Domain Steering Committee under Scott’s leadership,” said Campbell Pryde, President and CEO, XBRL US, “The materials developed will make it significantly easier for U.S. regulators to build effective standards programs that will result in better, more timely data, and reduce unnecessary inefficiency and cost in regulatory data collection programs,” Pryde said.

To help regulators and businesses learn more about the standard and taxonomy development, XBRL US is holding a webinar on August 12 at 3 PM ET. For more information on the webinar, click here.

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