The TSX Group has become an early adopter of a Web-based specification that could improve the sharing of financial information in stock exchanges around the world.
The Toronto-based TSX published its year-end results in extensible business reporting language (XBRL), a framework for handling
data based on extensible markup language, or XML. The TSX is one of more than 40 Canadian organizations — including Export Development Canada, the Royal Bank of Canada and Public Works and Government Services Canada — to join an international consortium working to bring the language to market.
Groups like the Canadian Institution of Chartered Accounts, which is backing XBRL, say the language could reduce the time it takes to extract important data from financial statements or annual reports through the use of metadata tags.
The TSX engaged PricewaterhouseCoopers to assist with its initial use of XBRL. Suzanne Hubbard, a PwC partner and Canadian XBRL practice leader, says the development of Canadian-specific XBRL classifications, or a taxonomy, has accelerated the development of the standard since the consortium took shape about five years ago.
In the U.S., XBRL working groups are creating industry-specific taxonomies for the financial services, forestry, oil and gas and other sectors. The TSX project is the first step toward creating a taxonomy for stock exchanges, Hubbard says.
TSX Group CFO Michael Ptasznik said the business case for XBRL lies in its potential to help reduce the information overload in financial reporting. “”It’s the simplicity with which, eventually, analysts and investors will be able to take down our data, compare with others and then use it in their models,”” he says. “”It goes along with our philosophy of better disclosure. The easier it is for people to access and utilize your information, that’s another means of increasing the disclosure capability.””
The Canadian taxonomy, which is still in draft form, was based on Version 2.0 of the XBRL architecture, Hubbard says. It will likely be improved by the introduction of Version 2.1, which irons out problems its predecessor had with calculation analysis. “”The tools haven’t caught up yet,”” she says. “”A lot of tool providers, now that there’s more instance documents being created, they’re creating tools so we can do this analysis.””
A project by the Federal Deposit Insurance Corp. will mandate banks to submit call reports in XBRL, which should also speed adoption, Hubbard says.