By Jason Bramwell
In an effort to address the increased demand for comprehensive and intensive training on eXtensible Business Reporting Language (XBRL), the American Institute of CPAs (AICPA) and XBRL US Inc., the not-for-profit consortium for business reporting standards in the United States, launched the XBRL US GAAP Certificate Program on July 9.
Developed and reviewed by XBRL US, the AICPA, and XBRL US members, including accounting firms and XBRL service providers, the certificate program provides finance and accounting professionals with the information and hands-on training they need to build high-quality XBRL-formatted financial statements using any software tool or working with any service provider.
The XBRL US GAAP Certificate Program also provides finance and accounting professionals access to tagging simulations, which will help them apply the principles presented in each course using software widely available in the marketplace.
The program consists of approximately thirty-five hours of online coursework (see sidebar).
"Correctly tagging financial statements and other business information in XBRL format requires both knowledge of reporting standards and the ability to navigate and apply the appropriate XBRL taxonomy", AICPA President and CEO Barry Melancon, CPA, CGMA, said in a written statement. "Participants in the XBRL US GAAP Certificate Program will receive the guidance they need to create and assure high-quality US GAAP XBRL financials for market consumption and analysis."
The Financial Accounting Foundation (FAF) and the Financial Accounting Standards Board (FASB) are responsible for the ongoing maintenance of the US GAAP Financial Reporting Taxonomy applicable to public issuers registered with the US Securities and Exchange Commission (SEC).
The taxonomy is a list of computer-readable tags in XBRL that allows companies to precisely tag the thousands of pieces of financial data that are included in typical long-form financial statements and related footnote disclosures. The tags allow computers to automatically search for, assemble, and process data so it can be readily accessed and analyzed by investors, analysts, journalists, and regulators.
"Ultimately, this is all about digital financial reporting and automating the compilation of financial information", Skip Falatko, CPA, CGMA, director of finance for the Maryland Association of CPAs (MACPA), told AccountingWEB. "Everything is going to be tagged, everything will be automated to a much greater degree than it is now, and everything will be machine readable, which will have huge implications for the CPA profession and the accounting profession."
The 2013 US GAAP Financial Reporting Taxonomy, which went into effect May 20, contains updates for accounting standards and other improvements to the 2012 taxonomy.
"Anything that FASB is working on is automatically important to CPAs. The idea that digital financial reporting is here is significant", MACPA CEO and Executive Director Tom Hood, CPA, CITP, CGMA, told AccountingWEB. "The tagging means, when you look at someone's data, like revenue for the MACPA, you'll be able to link to the FASB standard to see the accounting policy that's in play. Imagine hyperlinked financial statements. That's really what we're talking about."
XBRL Training Wanted
A recent survey of more than 1,000 members of the AICPA and XBRL US demonstrates a clear market demand for the intensive training provided in the XBRL US GAAP Certificate Program, particularly among public company preparers.
A majority of those surveyed (57 percent) said they needed expert or advanced knowledge of XBRL; however, only half as many (28 percent) said they currently possessed expert or advanced knowledge.
"The size and complexity of the US GAAP Financial Reporting Taxonomy requires a greater understanding of XBRL and the taxonomy", XBRL US President and CEO Campbell Pryde said in a written statement. "The certificate program is designed to help filers get the training they need quickly and cost-effectively, and to give them a deeper understanding of best practice and how to apply it."
More than 9,000 companies are required by the SEC to submit quarterly XBRL files that include tags for the full set of financial statements, including the detailed data in footnotes. The SEC initially allowed public companies a two-year grace period of limited liability on their XBRL formatted financials. However, limited liability expires for most public companies this year, meaning that the XBRL-formatted financials carry the same level of liability as the traditional paper filing.
"People should be able to know and see what public-interest organizations, like not-for-profit groups, are doing", Hood said. "If you don't standardize that data and create taxonomies that make the data machine readable, you're always going to have the potential for human error.
"Right now, everyone goes to GuideStar to pull out financial information about not-for-profits", he added. "What you get, just like in the old days with the SEC, is a PDF file that you can't do anything with. You have to sit down and type in the data. If I were to analyze five not-for-profits, I'd pull five GuideStar PDFs and key all that data into a spreadsheet. With XBRL tagging and not-for-profits publishing their financials electronically, you could theoretically pull those financials right into a spreadsheet without typing a thing. If I can get my financials to my constituents, my not-for-profit members, or other stakeholders, they can drill down and do comparisons in a much faster way than they can today."
Under the 2013 US GAAP Financial Reporting Taxonomy, the FASB has specific taxonomies for the following five industry groups:
- Commercial and industrial
- Banking and savings institutions
- Brokers and dealers
- Real estate
The MACPA is currently working with the FASB on a project to create a US GAAP taxonomy for not-for-profit organizations.
"There are a couple big steps in this process", said Falatko, who is leading the project for the MACPA. "The first is building this taxonomy, which is a framework for not-for-profits to use, as well as the mechanical aspects of identifying what are the most common accounting policies and practices in the not-for-profit arena. It's not as much about the tagging at this stage of the game. It's about building the foundation for XBRL in the not-for-profit world. The second step is how do we communicate the vision of this to the not-for-profit accounting world, even though there's no SEC-type entity to mandate it? That's sort of the bigger challenge."
"I would say the XBRL International certification course is complementary to what the AICPA is offering", said Hood, who passed the XBRL International course along with Falatko. "It includes a broad overview of XBRL in all of its applications, including the SEC piece. [The XBRL US GAAP Certification Program] is a deep dive into the actual aspect of learning how to tag using the GAAP and FASB standards."