Making company-specific reports more comparable
XBRL International has published draft guidance on Entity Specific Disclosures (ESDs) — disclosures made in a company’s financial statements that are specific to that entity (or a small number of entities). ESDs can be a challenge for both the creators and consumers of XBRL reports because, by their very nature, the disclosures are not covered by standard taxonomies.
These kind of disclosures are a vital part of the digital communication of financial statements and other similar reports that reflect the unique performance circumstances of individual companies and organisations. The operations of two competing oil companies will be significantly different and their financial statements reflect that reality. For preparers, regulators, analysts and investors alike, creating sensible comparisons is a complex undertaking. The ESDTF draft guidance suggests ways that regulators and filers can ensure that ESDs are useful and relevant.
The draft guidance has been created by the Entity Specific Disclosure Task Force, working under XBRL International’s Best Practice Board. In producing the guidance, the Task Force studied and documented existing practice at XBRL implementations from around the world, and has reviewed the different approaches being taken, including the use of extension taxonomies.
The guidance reviews the business requirements behind Entity Specific Disclosures, and makes a number of recommendations for improving the manner in which they are handled in XBRL reports. This includes the use of “anchoring” — the creation of an explicit relationship between each concept introduced in an extension taxonomy and a concept defined in the base taxonomy. The guidance also recommends the use of Inline XBRL (or iXBRL) for the “open reporting” environments where ESDs are encountered.
The Task Force is seeking feedback on this draft guidance, and would very much like to hear from users from all parts of the reporting chain. The task force has included a set of questions for specific topics on which review comments are requested. These questions, and information on how to submit feedback, can be found in the Questions for Respondents section at the top of the guidance.
The deadline for comments is 23 May 2018.
