Thursday, November 21, 2013

The State of XBRL: Asia & Beyond...

by: Cody Potter, Analyst

Having previously discussed the current state of XBRL in the United States, as well as Europe, we will wrap up the conversation by focusing on XBRL developments in Asia and the rest of the globe.

XBRL has been prevalent in capital markets in China, Japan, and South Korea for the better part of the past decade. As India, Indonesia and similar, rapidly emergent nations grapple with the growth of their financial infrastructure, XBRL will surely continue to be used in innovative ways in Asia.   

In 2005 China became the first country to mandate XBRL for listed companies on the Shanghai and Shenzhen stock exchanges. China was also the first country to apply XBRL to their entire mutual fund industry.

In 2011 China implemented the General Purpose XBRL Taxonomy, requiring XBRL use across several different Chinese Ministries. Chinese innovation continues to lead XBRL into new areas such as risk profiling, data mining and communicating text information along with financial data.

Japanese consumers of financial data are able to find it in two locations, Tokyo Stock Exchange’s TDnet and the Financial Services Agency’s EDINET. TDnet began supporting XBRL in 2003, and by 2008 both TDnet and EDINET were releasing full disclosures in XBRL.

Japanese corporations first release their financial statements through TDnet, and after they have been audited they are released in a more formal securities report through EDINET. TDnet allows companies to introduce new and expanded disclosures including forecasted earnings and other forecasts. More information about Japan’s disclosure system can be found here

South Korea’s DART system for corporate reporting has also supported XBRL since 2007.

For India’s part, their financial industry decided to take a planned, comprehensive approach to instituting XBRL. In 2007 their accounting regulatory body, the ICAI, established a group to develop and implement XBRL in India. The ICAI has recently developed its first official IFRS taxonomy for commercial and industrial companies, and is developing taxonomies for insurance, power, and non-banking financial companies.

The Reserve Bank of India has instituted a two-step plan for implementing XBRL in India’s banking industry. Additionally, the Securities and Exchange Board of India has begun plans for implementing XBRL for companies filing returns on their stock exchanges as well as for expanded mutual fund reporting.

Elsewhere, Singapore has required all companies incorporated within its borders to file in XBRL since 2007. Malaysia plans on instituting voluntary XBRL filing next year.

  • Australia has implemented a comprehensive reporting program, using XBRL to anchor a system designed to greatly reduce the costs of business reporting. Their approach, Standard Business Reporting expanded on a Dutch program, the Nederlandse Taxonomie Projectwhich now shares the same name
  • Canada has set up a voluntary filing program, and many Canadian companies cross-listed on U.S. exchanges or incorporated in the United States are required to file XBRL with the U.S. Securities and Exchange Commission (SEC).
  • XBRL in South America is largely voluntary, however increasing use in the banking sectors has continued the push for more standardized use.
  • ArgentinaBrazil, and Chile have discussed developing XBRL jurisdictions and have begun the process of implementing XBRL in their financial sectors.
  • In the Middle East, IsraelUAE, and Iran are all working on XBRL taxonomies for listed companies to develop reports.
  • 9% of companies in South Africa are expected to voluntarily file XBRL in 2013. 

As you can see, XBRL has made significant inroads into nearly every major developed economy. With its ability to provide end-users with clear, easy-to-access data, and reporting entities with a streamlined standardized reporting process, it’s easy to see why the reporting language is a natural solution for promoting uniformity and increased transparency in financial and business reporting.  We will leave you with a survey of current XBRL projects around the globe and potentially update this State of XBRL report with new developments in the years to come.

November 23, 2013, 12:15 AM ET; a note to our readers: We slightly amended this post from the original published on November 21, 2013 at 2:31 PM. We made modifications to take into account feedback received from one of our readers (comment below) to include and highlight the significant inroads that XBRL has made in Australia's government reporting; this is now noted in the new first bullet-point in the "Rest-of-World" section. We will also investigate this further and update this article after additional research.