ThinkTWENTY20

On Nov 10, Commissioner Caroline Crenshaw of the US Securities and Exchange Commission (SEC) spoke at the XBRL US Investor Forum 2021: Data that Delivers. In her introduction, she said “XBRL has made it easier and less costly to extract, filter, compare, and analyze the information in SEC filings. XBRL facilitates the comparison of a company’s information across time periods, against other companies, and between data in SEC filings and other agency filings. It allows for faster and more sophisticated analysis by regulators, investors, and academics.”

XBRL converts financial reports into data that can be imported directly into analytical tools and made more useful to investors, the SEC, other regulatory agencies, academic researchers, and financial analysts, among others. Crenshaw also observed that “All of this user activity adds up to more market transparency and more efficient markets.” Among the advantages of XBRL she cited were that since the XBRL mandate, stock prices have become more reflective of company disclosures, and the SEC has been able to use XBRL data to ensure better investor protection.

As for the future, she said “we at the SEC should continue to investigate where else data structuring can improve our disclosure ecosystem.” These might include, for example, environment, social and governance (ESG) matters, and proxy voting by investment funds. She also considered greater use of the Legal Entity Identifier (LEI). “The inclusion of LEIs in XBRL data has the potential to increase the usefulness of these data in SEC filings in a number of ways – for example, consistently identifying relevant entities in supply chains, or linking information on an entity across multiple regulatory data sets,” she observed. “The ability to use LEIs in XBRL data only increases their potential utility for users of our data.”

These events are documented at https://www.xbrl.org/news/the-benefits-are-well-documented-and-extensive-commissioner-crenshaw-on-the-secs-xbrl-success-story/ and https://www.xbrl.org/news/changing-with-the-times-xbrl-us-investor-forum-reveals-value-of-structured-data/ .