XBRL: IASB on digital reporting, less in non-financials, LEI taxonomy finalised

Here is our pick of the 3 most important XBRL news stories this week.

1 IASB member discusses benefits and costs of digital reporting

On 7 July 2020, IASB member Ann Tarca delivered a speech at the virtual annual conference of the Accounting & Finance Association of Australia and New Zealand (AFAANZ). She discussed digital reporting and included questions for practitioners, standard-setters and researchers.

As the owner of International Accounting Standards, the IASB is among the primary stakeholders and pioneers in digital reporting, thanks to its IFRS taxonomy. Its perspective counts!

2 Less is more in non-financial reporting

In the area of corporations’ non-financial reporting the problem remains that, although in the year 2020 we have reached a common ground on the fact that sustainability is a value worth preserving, there is no rate, no metric, no price nor cost attached to it, which arguably creates chaos for private and public actors alike. The fact that sustainability cannot be accounted for in a consistent way is the essence of the problem. Assuming that the chaotic framework for non-financial reporting is part of the problem, we argue that fixing that framework must be part of the solution.

When it comes to mainstreaming sustainability and ESG investing, the old adage counts that you cannot manage what you cannot measure. Hence stratification and standardisation of metrics is instrumental in achieving that aspirational goal. 

3 LEI taxonomy finalised

In reporting, the only thing likely to create more confusion than having two standards covering one field, is having two XBRL taxonomies representing the same standard. Computers are terribly literal machines and won’t understand, for example, that Japan.LEI and Mexico.LEI are referencing the same thing.

From the general to the specific, we are ending on an utterly technical note: The Legal Entity Identifier (LEI), the “global social security number for corporations”, finally has its unambiguous taxonomy. Celebrations!

 

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Christian Dreyer CFA is well known in Swiss Fintech circles as an expert in XBRL and financial reporting for investors.

 We have a self-imposed constraint of 3 news stories each week because we serve busy senior leaders in Fintech who need just enough information to get on with their job.

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