Wednesday, September 25, 2013

The State of XBRL: Europe

Following up on "The State of XBRL - United States", we will continue by examining how the specification has been utilized in Europe. Whereas XBRL usage in the United States and Asia has found its niche mainly in capital markets, European stakeholders have applied the reporting language more broadly, in an assortment of inter-government and cross-border usage. There are currently more than 55 active XBRL identified projects in nineteen European countries according to

Spain has long been at the forefront of European financial XBRL development. The Spanish banking sector was an early leader in the push for XBRL to enable consistent and efficient cross-border communications with its fellow European Union (EU) members. Spain has an established business register similar to the U.S.’s EDGAR link, and has also developed a taxonomy for reporting data of general identification (DGI) from non-financial economic agents. In 2010 Spain developed the CONTALOC taxonomy developed for inter-government reporting, and continues to push for expanded interactive data use throughout the country.

In the U.K, inline XBRL has been mandatory for filing with the Revenue and Customs office since April 2011. They also allow voluntary XBRL filing for corporations registered in the UK, through Companies House.

Germany’s XBRL history is a rather complicated one.

In 2011 the European Commission established a European System of Financial Supervisors (ESFS), creating three supervisory bodies with the goal of assessing and monitoring risks to the stability of the EU as a whole. The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA), two of the institutions created under the ESFS, teamed up with XBRL Europe to form the Eurofiling Initiative.

The result of this collaboration was a system of financial reporting using XBRL, (FINREP/ COREP) with the goal of standardizing the financial reports from European banking and credit institutions. These reports have been adopted by almost thirty European countries, and contain information about market, credit, and operational risk, as well as fund and capital adequacy ratios.

In 2004, the Dutch started their Nederlandse Taxonomie Project. The goal of this project was to ease the administrative burden on public companies by simplifying the way they report information, which would allow the government to process the data efficiently and effectively. As a result, the Dutch developed an XBRL taxonomy and required its use for taxation, financial statements, and economic statistics. In 2006 Australia decided to implement a similar program, and their combined approaches became Standard Business Reporting.        

This year’s 26th annual XBRL International Conference recently wrapped up in Dublin, in April, 2013. The major take-away from the conference seems to be that XBRL adoption worldwide is picking-up momentum, with the number and scope of projects continuing to grow. The following are some highlights from that conference:

  • The EIOPA, one of the three European supervisory bodies, has agreed to team up with the World Bank to create “a risk-based regulatory and supervisory framework in insurance.” Almost certainly part of this regulatory frame-work will require expanded XBRL use for large multi-national insurers.
  • Ireland will soon be mandating that all corporate tax payers file in iXBRL. Denmark plans to do the same for annual financial statements.
  • At the start of 2012, the Global Reporting Initiative in partnership with Deloitte Netherlands released their GRI taxonomy for sustainability data, and the 2013 version of the GRI taxonomy is planned to be released shortly.
  • The U.S. Securities & Exchange Commission (SEC) was present, and discussed their plan to develop a tool that can locate reporting inconsistencies by comparing XBRL filings within similar industries.

As the EU, IMF, the Basel committees, and G20 organizers continue pushing initiatives towards global reporting standardization, it is likely XBRL in Europe will continue to see broader usage as larger, standardized taxonomies begin to take shape.

Our next, and final,entry in the State of XBRL series will detail XBRL development in Asia and the rest of the world.