Accounting body to improve machine reading of filings

* IASB to help deeper scanning of company reports

* U.S. SEC said reliable global scanning system needed

By Huw Jones

LONDON, March 29 (Reuters) – A accounting rule setter will
step up efforts to improve electronic scanning of company
reports for investors after criticism from the United States.

Regulators are increasingly requiring listed companies to
use software known as XBRL when filing statements so that
analysts can spot trends and investment opportunities.

The software adds “tags” to different bits of information
such as whether revenues are reported in dollars or euros and
how much pension liabilities are discounted.

The data is machine read for rapid analysis but several
taxonomies or dictionaries for tags have emerged, making it hard
for investors to compare companies from across the world.

Some 1,500 U.S. companies file using XBRL with a further
8,000 companies being added from June when the use of XBRL
becomes mandatory for listed firms.

Europe is collectively trailing, partly because the taxonomy
it uses, which is linked to International Financial Reporting
Standards (IFRS), is seen as far narrower in scope than the U.S.
system.

“There is still concern about the adequacy of IFRS
taxonomy… whether it has enough detail for industry, to ease
the tagging process for companies and make resulting data useful
for investors,” Mike Starr, a deputy chief accountant at the
U.S. Securities and Exchange Commission, told a conference.

The SEC has refused to allow company filings under IFRS to
use XBRL and Starr indicated there would be further delays.

HAMPERING

Hans Hoogervorst, incoming chairman of the International
Accounting Standards Board, which devises IFRS rules, said there
will be proposals in April to extend the scope of its taxonomy.

“I am hopeful we can address the problems the SEC is seeing
and hopefully the use of IFRS taxonomy can be allowed. A lot of
these problems will be solved,” Hoogervorst said.

The IASB wants the United States to say this year it will
adopt IFRS and resolving taxonomy issues is part of this.

“We are working hard on a proper IFRS taxonomy. Without it,
the spread of IFRS will be hampered,” Hoogervorst said.

Starr suggested the IASB should undertake responsibility for
developing and maintaining a globally recognised taxonomy.

“If we have multiple taxonomy, that is contrary to having
the goal of single set of high quality global accounting
standards,” Starr added.

Stephen Cooper, an IASB board member, signalled caution
about getting the board too closely involved with XBRL but
agreed it was hard to get users to embrace XBRL until there was
a single global taxonomy, he said.

The European Commission urged a cooperative approach.

“Nobody buys an iPhone because you are told to do it. The
market will decide. There is still a lot of work to be done,”
said Jeroen Hooijer, a senior official at the EU executive.

XBRL stands for eXtensible Business Reporting Language and
is from software provider UBmatrix, owned by EDGAR Online Inc
(EDGR.O: Quote, Profile, Research).

Accounting body to improve machine reading of filings