The short ramp-up time is encouraging news for other companies that may be taking a wait-and-see approach, and Blaszkowsky says XBRL is likely to only get easier as momentum grows. “Clearly there are multiple ways of getting your content tagged, and I think best practices will emerge very quickly,” he says. Not to mention he finds it “reasonable to expect” that ERP vendors will bake XBRL tags into their systems once it becomes a mandated language. “This is compelling to anyone engaged in financial markets; anyone who believes in transparency,” he says. “It would be hard to see it as a political issue at all.”
But are there benefits for the companies that implement it? Not so far, based on an assessment by members of Financial Executives International (FEI) who have been using XBRL as part of the SEC’s nearly four-year-old voluntary filing program. “As preparers, we have learned that there are no improvements at this time in our internal processes as a result of creating and providing tagged information, and that preparers do, in fact, experience increased costs and efforts as a result,” wrote Arnold Hanish, chairman of the FEI’s Committee on Corporate Reporting, in a letter to the SEC’s Committee on Improvements to Financial Reporting. Could that improve next year? “We’ll have to wait and see how it plays out,” Bleier says diplomatically.
Big changes to FASB’s controversial standard on fair-value measurements seem unlikely any time soon. Even the representatives of financial-services institutions, until now the fiercest opponents of the FASB standard, SFAS 157, seem wary of calling for replacement or suspension of the measure in the face of the plummeting stock market. Indeed, Bob Traficanti, the head of accounting policy and a deputy controller at Citigroup, who in May publicly objected to the standard’s effects on banks during the subprime crisis, fully supported it in November at the SEC’s final roundtable on the topic. Traficanti, a former FASB project manager, said both he and Citigroup “believe 157 should be left intact.”
Many agree that it doesn’t make sense to tamper with the rule now and risk losing whatever investor confidence still remains. “From everything I hear, I don’t think anyone is going to be suspending fair value, or anything like that,” says Robert Kueppers, deputy CEO of Deloitte USA. Thus, the study on SFAS 157 that the SEC is presenting to Congress this month seems unlikely to recommend a radical change in mark-to-market regimes.
Financial Statement Presentation Project
This once-radical effort to have companies reorganize their financial statements in ways that would potentially change how Wall Street views them has been toned down to a large extent. In the original draft version, for example, companies would have eliminated the net-income line from their reports; in FASB and the IASB’s current joint proposal (out for comment until April 14), net income still exists as a subtotal on the statement of comprehensive income. Still, “it’s a very ambitious project and a very different presentation,” says Grant Thornton’s John Hepp.