A NEW reporting language is coming that will allow companies to electronically export data from their reporting systems into any format.
Within two years Australian companies will be required to lodge all of their information with the Australian Stock Exchange using XBRL.
Insurance companies are already using the language to report to the Australian Prudential Regulation Authority.
Standing for extensible business reporting language, XBRL allows any piece of a company’s financial data to be used for different purposes.
With present technology, companies are often forced to re-key data to meet various reporting regimes.
The language also could prove a boon for investors.
However, common software packages such as Microsoft Excel cannot connect into XBRL.
XBRL Australia director Jim Dixon said once software packages could connect into XBRL, investors would be able to compare companies because their financial data would match up – and investors won’t be forced to manually key the financial figures into their systems.
“Once you can connect into XBRL the world will be at your fingertips,” he said.
“I think, as the language gets more widely used, we will see quarterly or even more frequent reporting from companies.”
Australian Shareholders Association WA branch chairwoman Anne Price said the ability to compare results could be useful but could also be dangerous.
“You need to be able to compare like companies with like,” she said.
“You can’t put a gold explorer in the same basket as Woodside, for example.”
XBRL is already widely used in the US.
In Australia, CPA Australia and the Institute of Chartered Accountants in Australia have largely driven the language’s development.
KPMG has spent about $1 million in terms of salaries on the project.
