The XBRL International Standards Board (XSB) has reached another milestone in its effort to make the XBRL standard easier to develop, use, and compare. On October 6, it released Preserve. Promote. Participate. Moving XBRL Forward, which details six initiatives that aim to (1) protect current investments in XBRL; (2) encourage the adoption of XBRL worldwide; and (3) prepare XBRL for new opportunities in the future.

The proposals follow the XSB’s publication of the discussion document XBRL: Towards a Diverse Ecosystem in February. As John Turner and Chethan Gorur, former and current XSB Chairs respectively, explained in an interview with this blog at that time, the discussion document explored the future business requirements of the data standard and set forth a set of goals that would help ensure those needs.

In that interview, John and Chethan emphasized two points:

(1) There is no uncertainty about the stability of the existing XBRL standard, which works well and is being used successfully in dozens of countries by millions of companies. The purpose of this XSB effort is entirely about doing the long-term planning that will ensure XBRL is a lasting and sustainable success.

(2) Although the XSB had come up with specific goals and proposals for each, it was just at the discovery phase of the process. The key element in evaluating and refining this plan would be the feedback they received from developers, filers, analysts, investors, and all other XBRL stakeholders.

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Written by Bob Schneider     Posted on October 2, 2010

As reported previously in the business press, Robert Herz has retired as chairman of the Financial Accounting Standards Board (FASB). Beginning his tenure at the time of the Enron scandal, Mr. Herz had headed the organization for more than eight years. Effective October 1, Ms. Leslie F. Seidman is Acting Chairman; Russell Golden assumes his seat on the Board.

Mr. Herz is widely recognized as a strong supporter of XBRL, but just how early he saw its value is less well known. In 2000, only a couple of years after XBRL’s inception, Mr. Herz wrote a book with Robert Eccles et al The ValueReporting Revolution: Moving Beyond the Earnings Game. Introducing the then-new technology to readers, the authors state:

It is felicitous [emphasis in original] when a new technology emerges that a revolution can press immediately into service…The new technology for the ValueReporting Revolution has an appropriately arcane name, XBRL…With XBRL, virtually anyone can take information from a company’s website and directly download it to software on any device, including the Internet, for quick and easy analysis in any number of ways.

As I read over the comments in the book concerning XBRL, two themes came into focus. First, the authors envisioned that XBRL would be a catalyst for creating a single set of global accounting standards. Second, despite spending his career focusing on financial information, Mr. Herz recognized its limitations and put great store in nonfinancial indicators. XBRL would be crucial for their dissemination and use:

Current efforts to develop XBRL have focused on definitions relating to the existing accounting standards used in various countries, U.S. GAAP and IAS [the predecessor of IFRS]....Guess what? XBRL could also serve as the Internet platform for the nonfinancial value drivers discussed throughout this book, even for qualitative information. But only when standards are developed for these nonfinancial measures, similar to those for financial measures, can the full benefits of XBRL be realized in the ValueReporting environment. [p. 309]

Speaking at the 11th XII Conference in April 2005, Mr. Herz discussed his vision of what he believed corporate reporting – not merely financial reporting – should be, and the key role to be played by XBRL:

The use and benefits of XBRL can -- and I believe should -- extend beyond financial information…I think the future might go something like this: At the center of global corporate reporting would be a core reporting product for companies participating in the international capital markets, one containing both financial statements, financial disclosures, and other financial data based on a single set — or at least a substantially common set -- of accounting standards, as well as key nonfinancial information and key performance data, hopefully based on common definitions and probably by industry sector…(9:53-11:22)

And as this CFO.com article states, when Chairman Cox began to campaign in earnest for the SEC to adopt XBRL, Mr. Herz was a firm ally:

The Financial Accounting Standards Board appears poised to significantly increase its role. FASB Chairman Robert Herz has repeatedly expressed support for XBRL. Indeed, while it is clearly Cox's initiative, he and Herz have both been beating the drum for XBRL as part of Herz's much broader public campaign to reduce accounting complexity.

A KPMG report on IFRS issued in 2007 provides further evidence of Mr. Herz's support for the data standard:

[Mr. Herz] was enthusiastic about XBRL and the use of such technology. ‘The big question over all of this is if XBRL really takes off and gets driven down into companies’ internal reporting systems what influence would that have on IFRS’, he said. ‘You could have a core set of financial standards and then a set which are technology-driven’…Narrative reporting and financial reporting becomes much easier with tagging’, he said. ‘Turnover? Would you like to see the six different components of turnover? Click! And so on’.

Mr. Herz’s vision for corporate reporting has, of course, yet to be fully realized; but his efforts toward that goal have been well rewarded. As work proceeds toward adoption of a single set of global accounting standards and implementations of XBRL spread, his impact on both financial and nonfinancial reporting will be felt for many years to come.