Where XBRL and IFRS meet making the alphabet soup palatable.

• Author: Servais, Olivier
• Position: Interview

AS IFRS convergence marches on, and extensible business reporting language (XBRL) continues to grow into its role in that process, California CPA talked with Olivier Servais, director of XBRL activities at the IFRS Foundation, who stands at the crossroads of these two financial movements about the importance of the two and what they mean for CPAs.

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What is the IFRS Foundation and what is its mission?

The IFRS Foundation is a London-based independent, not-for-profit, private-sector organization developing a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards. Through IASB, its standard-setting body, the overall mission is to bring about convergence of national accounting-standards to support better efficiencies in the capital markets so information can be compared and analyzed to protect investors and the public interest. To accomplish this mission, the IASB works closely with stakeholders around the world, including investors, analysts, regulators, business leaders, accounting standard-setters and CPAs.

What is your mission with the IFRS Foundation?

We are responsible for XBRL activities, which aim to facilitate the information exchange between market constituents. We are developing the IFRS Taxonomy, which is the representation in XBRL of IFRS, including International Accounting Standards, Interpretations and concepts for Small and Medium-sized Entities (SMEs). The IFRS Taxonomy contains tags for all IFRS disclosures. By providing the IFRS Taxonomy, the IFRS Foundation seeks to address the demand for an electronic standard to transmit IFRS financial information with XBRL.

Why is having the IFRS taxonomy important?

Instead of treating financial information as a block of text a standard internet page or a printed document it provides an identifying tag for each individual item of data linked to accounting standards so data can be compared, audited and checked by computers. XBRL was created by the accounting profession for the profession.

What is an XBRL taxonomy and why is this important to your business area at the IFRS Foundation?

XBRL taxonomies are the computer-readable "dictionaries" of reporting principles and especially accounting principles like U.S. GAAP and IFRS into XBRL. A taxonomy provides definitions for XBRL tags, information about the tags and it organizes the tags so that they have a meaningful structure. Using the IFRS taxonomy links...