Successful companies prepare for the move to XBRL compliance

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Successful companies prepare for the move to XBRL compliance

EXtensible Business Reporting Language (XBRL)

As global accounting standards have started to converge, businesses are increasingly being required to understand and adopt XBRL as an enabling technology in enterprise wide disclosure initiatives being mandated by global financial governing bodies, such as the SEC’s Final Rule in the US and HMRC in the UK.

Executing any company IT strategy requires knowledge, foresight and careful planning and XBRL is no exception. Companies that have completed XBRL implementation and filed successfully know that it involves the transformation of the reporting processes — migrating reporting processes designed with presentation-centered, paper-based objectives to one which ignores form and is entirely electronic and data-centric.

So how does a company begin the time-intensive task of preparing to file in XBRL, which starts well before the filing event and continues thereafter?  The first step is to be aware of the challenges and issues:

  • Educate your financial team about XBRL
  • Avoid rework and risk by planning your implementation approach
    • Process impacts should be considered. Be aware that upstream of XBRL there will be organizational processes change.
    • Assemble cross-functional teams across the technology, accounting and finance
    • Be aware that the time cost, and manual steps to produce XBRL statements often exceeds what regulators and preparers anticipated
    • Do not underestimate data architecture including meta data to enable XBRL and the maintenance to keep the XBRL reporting machine humming
    • XBRL isn’t human–readable. Be aware that there are different approaches to making the data readable and enabling visualization.
  • Allow time to map data to tags, or taxonomies to enable useful reporting
  • Allow time for an internal walk through, to test the accuracy and completeness of the data in XBRL
  • Build change into your plan. Tags built today will need to be edited and extended tomorrow as rules changes and your understanding of the data changes.
  • File voluntarily to get XBRL right
  • Caveats – current regulatory rules do not require independent auditor assurance on XBRL submissions
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By | 2017-05-04T04:07:13+00:00 March 11th, 2009|transparency, Uncategorized|0 Comments

About the Author:

Michael is Managing Partner & CEO of No World Borders, a leading health care management and IT consulting firm. He leads a team that provides Cybersecurity best practices for healthcare clients, ICD-10 Consulting, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, Insurance Fraud, payor-provider disputes, and consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $4 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, Stanford Medical School - Biomedical Informatics, Harvard Law School - Bioethics.
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