XBRL will allow financial information to be extracted from an issuer’s financial statements and compared nearly instantaneously. This would potentially save analysts, regulators and other users considerable time, while creating a level playing field in terms of information access.
So why do Canadian security regulators appear to be taking a wait-and-see approach to mandating the use of XBRL?
Well, it really is a matter of timing. Canadian public companies are preoccupied with the challenges (including potential technological challenges (pdf)) of converting to international financial reporting standards (“IFRS”) by the start of 2011.
Last year, James Turner of the Ontario Securities Commission suggested that Canadian regulators shouldn’t require the adoption of XBRL before IFRS is implemented. “From our point of view, the right sequence of events for our capital markets is first to make the transition to IFRS then adopt XBRL as a mandatory requirement.”
In the meantime, he encourages the voluntary use of XBRL across Canada.
To learn more about XBRL adoption in Canada, visit http://www.xbrl.ca
Interesting to know the relation between IFRS and XBRL in Canada. Does that mean that XBRL’s adoption in the US is not being delayed because the US is not pursuing IFRS?
Well, more or less. Last December the SEC mandated 500 of the largest public companies in the U.S. to start filing in XBRL by summer of this year and all SEC-reporting companies to file in XBRL by 2011. However, there has not been any definitive action with respect to mandating U.S. public companies to adopt IFRS.