Corporate finance executives are getting more vocal over their frustration with XBRL. At a recent Financial Executives International conference, executives said they aren’t using financial data formatted in XBRL for their own data research purposes. They’re simply submitting their financial data in the XBRL format to meet a regulatory requirement.
“This isn’t something I’ve heard my analysts say is useful,” said Nick Cyprus, vice president, controller and chief accounting officer at General Motors at the FEI conference, according to CFO magazine. Finance chiefs at McCormick & Co. and at Johnson & Johnson echoed Cyprus.
Stephen Cosgrove, vice president, corporate controller and chief accounting officer at Johnson & Johnson, reportedly said his own research tools are more sophisticated and capture more than XBRL provides. “We see absolutely no use for it,” Cosgrove said. “It’s just redundant to what we already have.”
Michael Kaplan, a partner at international law firm Davis Polk, asserted that companies are having a hard time adhering to the reporting requirement, whether they perform the job entirely in house or outsource some portion of the tagging. Companies also are finding that the filings and formatting are targeted to investors needs, not internal corporate needs.
The Securities and Exchange Commission isn’t oblivious to the concerns. Paul Beswick, acting chief accountant at the SEC, reportedly said at the FEI conference that his staff has heard from many people who have shared their challenges and their concerns about whether investors are making good use of XBRL-formatted information. He said the SEC’s economic analysis group has found that data aggregators are using XBRL information and find it helpful.
Charles Hoffman, an accountant who helped develop and promote XBRL, said acceptance and utility will follow software development. “There’s no way you can bolt on or send out to a financial printer to have more work done and then have the CFO say with a straight face that there’s any value being created,” he said. The value comes, he said, in changing systems so that numbers are managed and financial statements are created in XBRL rather than converted to XBRL after the fact.
Hoffman predicts the advent of newer and better software will make XBRL more useful to companies internally. He predicts new releases will be rolling into the market in mid to late 2013.