Last night, 2 of our Directors presented to an audience of 40+ tax professionals as guests of Lexis Nexis.  As iXBRL was the topic of this month's meeting, the first presentation of the evening was by Mark Holden and Stephen Banyard from HRMC where they gave the audience an overview of iXBRL, many of whom were hearing it for the first time.  Interesting speaking to Mark before hand that he feels that the message is getting through now, and his answers to the usual questions about the suspicion and cost of this initiative have taken on more credibility as a result of being in the field with early adopters. 
Some concerns which they are trying to head off include the acceptance within companies that this is a team effort for tax, accountants and IT departments together.   Another benefit that has emerged is a greater communication in companies that have multiple subsidiaries, the point being that they have to now talk to each other, or at least acknowledging that each other exist.

Questions from the audience were plenty and the theme that made the biggest impression was the need for accountants to make judgements about the tags that they use.  The best example of this came from a representitive of E&Y who recall the story from the SEC filings in the US where Microsoft mixed up contexts to post in XBRL values in millions instead of billions of $$$!  Joking apart, we know that the taxonomy is in plain English but there is still a point where a judgement call has to be made.  For on line iXBRL solutions that recommend the closest tag to the text and "semi-automate" the tagging, this doesn't help at all, instead it was deemed by the audience to proliferate the problem.  With the exception of our SME template offerings, we also found that the discussions that FTSE 350 companies have about which tag to choose can't be automated and that the up front analysis process is a crucial part of the implementation.

However those that are wondering how HMRC will validate whther the "correct" tags have been used can console themselves when, last night they admitted that for first time in their online history, they are "prepared to accept an imperfect return!"

Slides and notes will appear on the Lexis website in the next few days, link to follow...

A little bit US centric, but the message is universal...

Looking only at time and cost of internal preparation of SEC (HMRC in case of UK) reports is a perfectly valid approach, and I agree that it's hard to get hard data since people, budget, solution, sampling techniques, and financial complexity differ widely.

However, in the first five years of a new reporting format, it is relevant to not just look at internal filing costs but also consider external filing solutions and their costs and performance.

For instance, what if external providers gave you a wide range of their solution charges (I don't think they will give you their actual costs.) Perhaps they could break it down between block-style notes and and for detailed notes.

XBRL is like any new business---early expert solutions tend to be cost-efficient vs. internal preparation (do-it-yourself). For instance, I would find it very costly and time-consuming to build or purchase my own electric generator, upgrade it continuously for safety and performance, haul in the logs or gasoline, etc. I've decided to pay the local electric company $83 per month for their service. I do lose some self-sufficiency, but I have made the decision that it is cheaper and better to have someone else do that.

There's been a lot of queries into Arkk lately about Notes on Statutory Accounts and whether they will make it into the iXBRL.  HMRC don't label the Notes fields by number in their mandatory requirements list, but there's a certainly plenty of space for them.  In fact many of our clients are going to use the Notes fields as a general depot for info that has no obvious tag.  What this does mean of course is that the accounts you submit in iXBRL CAN look like the hard copies you submit today.

Interesting article on Accountancy Age today about the looming iXBRL deadline, "iXBRL likened to Y2K".  Whilst the headline is slightly reactionary, and maybe reflects on the quoted parties own concerns about having a product in the market today, there are similarities between March 31 2011 and January 1st 2000.   Normally IT projects and their risks are mitigated by extensive testing.  I have no technical worries about xbrl or indeed ixbrl, the former is used globally and the latter is easily tested by having your own ixbrl to xbrl "sausage machine" as we have affectionately named ours!  The bigger risk is in the resourcing.  Already, with 18 months to go we are hearing that the availability of the HMRC's SDS team will be stretched thinner as deadline day approaches.  Reports as recent as last week suggest that they can't even verify that the correct tags are being used such is the demand on their time.  These are very helpful people, but I'd be interested to hear how many of them given the iXBRL deadline have been granted leave to take their Summer holidays this year.  Early adoption is the only real answer.  Thorough testing, ironing out problems, getting ready to file NOW - that's the Arkk Solutions approach.  Sure the deadline means a great deal, but the early adopters will be the ones who can relax.  If you could have reassurance that a solution worked 12 months + before the mandatory deadline, wouldn't you want that?  Read the full article at
http://www.accountancyage.com/accountancyage/news/2256157/ixbrl-likened-y2k

Microsoft have added a pretty good list of FQA about their moves in the XBRL space, check them out at http://www.microsoft.com/msft/FAQ/xbrl.mspx, also the article "The Road to Better Business Information: Making the Case for XBRL" is worth a read if you're trying to see what the point of it is.

The IT and tax faculties of ICAEW recently joined forces to present an event entitled 'demystifying XBRL'. The breakfast presentation was designed to help attendees understand, and prepare for, the imminent requirement to file returns, computations and accounts online using iXBRL (inline eXtensible Business Reporting Language). Just in case you were wondering how imminent, the use of iXBRL will be mandatory for all Corporation Tax returns from April 1 2011 (with some exemptions regarding accounts for certain unincorporated organisations). The CT 600, computations and accounts will all need to be filed online using iXBRL. The event was full with a waiting list for those turned away but repeats are planned in London and around the country in the new year. It will be repeated in Chartered Accountants’ Hall on 1 March; then it's planned to do Bristol on 2 March, Durham on 4 March; Birmingham and Manchester will be on 25 and 26 February but we’re not yet sure which way round. Keep an eye on IT Counts for further details and a link for online bookings …

On to the detail of the event. Paul Booth kicked off the event with a brilliantly straightforward explanation of the technology underlying iXBRL. In just a few PowerPoint slides (Paul Booth's iXBRL PowerPoint slides) he took the audience from making a word on a web page 'bold' to being able to allow a computer to extract the relevant information from a page of accounts and know how to process it. We'll start with the language of web pages, HTML (HyperText Markup Language). At its simplest, HTML allows a computer to render text in a particular format by using 'tags'. If you want a word to appear in bold text on your web page, you would turn on bold using the bold tag and then turn it off again:

<b>bold</b>

From HTML we go to XML (eXtensible Markup Language) which uses exactly the same structure to greatly increase the power of a web page. HTML enables humans to read content, XML allows both humans and computers to read web pages. By adding a descriptive tag to an element within a web page, a computer can extract the information directly. For example, if you wanted a computer program to be able to 'read' a page of text and extract the value for 'Profit' from within it, you could produce something like the following:

The profit for the year was <profit>10000</profit>

Again we just use simple text tags, but this time to describe what the element is, rather than just how it should be displayed. (There is an alternative explanation of XML already on IT Counts featuring Liz Hurley.)

XBRL (eXtensible Business Reporting Language) is simply a method of organising XML tags in a way that makes them useful for business reporting by being able to show relationships and underlying calculations. This involves the use of a taxonomy which is just a method of classifying items within a collection. In business reporting this means that insurance would be part of administration expenses which in turn would be part of profit or loss. To take a more tangible example, whether your music collection is on vinyl or iPod, the track 'You can't always get what you want' is on the album 'Let it Bleed' by the artist 'Rolling Stones':

Happy New Year dear reader, at arkk we're gearing up for a big year in 2010.  As 2009 closed I was invited by our friends at CIAEW to their "Demystifying XBRL" seminar which took place on December 17th at One Moorgate Place.  With over 100 professionals from the world of accountancy it was a splendid barometer to indicate how the market was embracing the Ghost of Christmas Future.  Most of the people I talked to were encountering the subject for the first time, and there was a lot of baffled expressions, despite the best efforts of the presenters who did their best to keep it simple (I thought the presentation by CoreFiling of their in development product was enjoyable - again from an IT perspective).  This is the challenge of introducing such a complex IT solution (iXBRL) to an audience whose knowledge lies within another domain (accountancy).  Personally it took me weeks to get used to xml grammars when I first started out as a developer (and my projects had no tupples in, unlike XBRL!) so what chance does a room encountering it for the first time have? 
The New Year will bring new premises for arkk, we're moving offices from leafy Bishop's Stortford to The City, check out our contact page for our new address, and all the best for 2010!

Multi-nationals are slowly realising that the introduction of a global standard will have an effect on their business even in a market that hasn't yet adopted iXBRL or even XBRL.  In our recent discussions with the Australian Treasury's SBR (Standard Business Reporting) team , it was revealed that  those Australian companies who have offices in countries that already have XBRL are already affected despite the mother office being in Australia.   Australian companies with subsidiaries in the UK will need to comply in iXBRL, whilst the Australian one adopts the Australian taxonomy.  Even in a global standard, cultural differences however will apply.  The SBR group estimate  around 50 companies will be impacted by this fast tracking.
That's not to say that the Treasury aren't ready; they are.  Like most government bodies around the globe they are keen to have early adopters and have gone to extraordinary lengths to provide software vendors with pre-built SDKs (software development kits).  They're leaving the mapping of the files to the software vendors, but they have a strong tradition in electronic filing and have a firm desire to evangelise about the merits of machine to machine automated communication.  But because the standard isn't mandatory yet (a date hasn't even been suggested), most companies are deferring the requirement on grounds of cost vs necessity, or just waiting to see how the market reacts.
We did find some visonaries who are looking beyond the first phases of the standard.  Leading Business Intelligence software vendors are discussing their role once XBRL is adopted globally.  There'll be new requirement to slice and dice data from multiple entities, a job made easier by an agreed semantic definition in xbrl when you can compare "apples with apples".