On XBRL and the footnotes…
I was supposed to be at this XBRL conference that is taking place today and tomorrow in Arlington, Va. but unfortunately came down with a nasty cold and decided to participate virtually via Twitter and by dialing in to the sessions that seem particularly interesting, which is how I’ll be participating in a panel that I was set to appear on later today at 4:30 est called “Finding the Nuggets in Financial Reports”. Here’s a description of the panel:
As corporate investor-relations sites, social media and financial information start adding XBRL and other data standards into the mix, we’ll take a step back and discuss what the users of this information want to do with it. What does having access to financial content as XBRL mean in practice for investors; just what are investors doing with the content they have today, and what do they expect to do in the future? What do investors/consumers expect from a fusion of cloud computing, search engines and the Semantic Web?
Lots of interesting questions, but at least so far in my mind, not a lot of good answers. I think that there’s general agreement that XBRL can be very helpful in crunching numbers, but as footnoted readers know, the numbers only tell a piece of the story. To really understand what’s going on, you need to read the footnotes.
So I’d be interested in knowing what footnoted readers think about XBRL. Is it going to change the world as you know it or is it much ado about nothing? You can either post a comment below to get the conversation going or send a note to me here.
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Posted in Tags: 10-Ks, XBRL |
 5 Comments » |
October 5th, 2009 at 10:29 am
I have been using XBRL (via edgar) for quite some time now and it certainly eliminates data entry of the numbers, and helps open up time to read what is more important, the footnotes. It seems they are going to make an effort to XBRL some of the footnotes (future debt maturity schedules would be GREAT! and possibly share-repurchase histories, etc.), but it seems XBRL can’t replace reading, that’s sad. In all seriousness, I think the benefit will be that you should be able to organize the information in a (your) standard format and read from there as to get better YoY and QoQ comparisons/trends of what the company is reporting (as we learn here at footnoted). Also, I would assume there will be at least a marginal increase in transparency of reporting by companies now that data mining will be easier by more investors.
October 5th, 2009 at 12:04 pm
For what it’s worth, the 3-year plan for XBRL includes a provision for any numbers in the footnotes to be annotated also.
Clearly this doesn’t cover things like changes in accounting policy, but it should certainly make it easier to tie things together.
October 5th, 2009 at 1:03 pm
@ Justin: Thanks. That’s interesting. You’re an individual investor, right?
@Toby: I actually wasn’t aware of that. Guess I’m still confused about how you can properly (adequately?) tag different sections of test. Numbers seem easy in comparison, but I admit that I’m still just dipping my toes in here.
October 13th, 2009 at 8:28 am
I am an individual investor.
December 2nd, 2009 at 3:27 pm
One of the key features of the SEC XBRL mandate is to incorporate footnote tagging. The first phase is to simply tag footnotes as blocks of text (block-tagging, as they call it). The second phase will involve detail tagging of footnotes. This will include picking up numbers from footnotes and tagging them, translating “footnoted” tables into XBRL tags. In fact, the latter appears to be causing a lot of problems to most XBRL taggers. I am part of a joint-venture that actually has made significant strides in this area of detail tagging of footnotes. Like you say in your blog, footnotes are the very key to understand how real information is being obfuscated in the main financial statements. Without them, tagging data into XBRL is simply a clerical exercise that results in data of somewhat dubious value.