The European accounting body plans to increase efforts to improve electronic scanning of company reports. This comes after criticism from the United States. We found this interesting news on London South East in their article, “Accounting body to improve machine reading of filings.”

Financial regulators are more and more requiring listed companies to comply with the XBRL (eXtensible Business Reporting Language) standard when filing statements to allow for analyzing. Since the software adds tags to the data and then is auto-read, it allows for rapid analysis. Meanwhile, the taxonomy used in Europe, which is linked to International  Financial Reporting Standards (IFRS), is seen as far narrower in scope than the U.S. system.

The inconsistency makes it hard for investors to compare. Getting everyone to agree on one language, one taxonomy will be the hard part.

Melody K. Smith

Sponsored by Access Innovations, the world leader in thesaurus, ontology, and taxonomy creation and metadata application.