Here is our pick of the 3 most important XBRL news stories this week.
1 EU to move forward with Single Access Point
This week the European Commission (EC) has announced that a new European Single Access Point for seamless access to financial and sustainability-related company information will be set up in the second half of 2021.
Just having companies report in a standardised data format through disparate channels is not enough to allow stakeholders discover and compare multiple firms’ information in a quick and efficient way. Therefore, the Single Access Point (comparable to the US SEC’s EDGAR) is welcome news.
2 SASB engages PwC’s XBRL practice to support build of XBRL taxonomy
At SASB, we are always watching for innovations that streamline the flow of non-financial information between companies and investors. Companies increasingly turn to digital tools and processes to simplify both reporting and use of corporate performance data. The use of structured data and eXtensible Business Reporting Language (XBRL) is one of the most promising advancements, with positive implications for data producers and data consumers. Already embedded in many financial accounting standards and reporting requirements, XBRL taxonomies define key business terms and validation rules. XBRL provides a structure for data preparation, assurance, and analysis that can be used for both financial and non-financial data.
In line with last week’s thread of the building momentum for standardised, mainstream non-financial reporting, the Sustainable Accounting Standards Board is now embarking on a process to build its own XBRL taxonomy. Seen from a generous perspective, this move does not come a minute too soon, as the space is soon to become a lot more crowded.
3 An opportunity for standardisation
Financial institutions across the world are searching for ways to overcome squeezed margins by improving efficiency and reducing costs. As a trade association, ISDA’s driving motivation has been to help our members achieve that goal, and we’ve developed various mutualized solutions that do just that. But we think there is an opportunity to go further – by creating greater alignment and standardization between derivatives and securities financing transaction (SFT) markets.
The leading International Swaps and Derivatives Association (ISDA), whose Master Agreement is known to everybody dealing in Over The Counter (OTC) derivatives transactions, is driving a major push towards the standardisation and digitalisation of trading and settling OTC derivatives. This industry has traditionally been using lots of computing support in what I jokingly call a CAM paradigm – Computer Aided Manufacturing, as opposed to a truly industrialised process, which requires standardisation to handle counter party interaction. The new Common Domain Model is a good example.
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Christian Dreyer CFA is well known in Swiss Fintech circles as an expert in XBRL and financial reporting for investors.
We have a self-imposed constraint of 3 news stories each week because we serve busy senior leaders in Fintech who need just enough information to get on with their job.
For context on XBRL please read this introduction to our XBRL Week in 2016 and read articles tagged XBRL in our archives.
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