XBRL implementation is gathering pace (see my blog XBRL - more than just a regulatory tool ? ) and alongside I am starting to hear concerns with the way things are progressing.  There are worries about the impact of XBRL on internal management accounting and also concerns linked with the proposed switch to IFRS for SMEs in the UK.  On a positive note, the European Federation of Accountants (FEE) has produced a useful project update on XBRL which is well worth a read.

The requirement to file XBRL financial statements for Companies House and HMRC purposes is thought by some to be a precursor of standardised management accounts.  The argument is that these bodies will specify a detailed standard template for submission of accounts through the XBRL taxonomy or chart of accounts.  Smaller companies will then need to either adopt this chart of accounts in the internal accounting or incur the additional cost of translation to the prescribed format.  As a result many of these companies will just fall into line with the standard format and so lose the flexibility to internally account for their transaction in a way that suits their particular organisation.

I remain unconvinced of this argument but would certainly like to hear more from those of you more closely involved with small company accounting.  My view is that we have had prescribed statutory accounting formats for many years and that companies have still been able to organise their internal accounting in any way in which they want.  I accept that smaller companies invariably organise their financial accounting to facilitate their year-end statutory accounting but I see no evidence that this hinders the separate flow of management information.

Another potentially more threatening development in this regard is the level of information that banks and other credit institutions might start to demand in XBRL format.  We all know how difficult it is for companies to get bank loans etc at the moment and so it will be difficult for these companies to refuse to agree to regular flows of management information in prescribed XBRL formats.  However, I'm sure that the pressure to submit information for credit control purposes to banks in a standardised, comparable form has been with us for some time and has not led to the demise of useful company-specific management information so I'm not sure the advent of XBRL will either.

Recent experience with public sector software developments leads some to question whether HMRC & Companies House can keep to their existing timetable (see blog link above) which envisages introduction of XBRL efiling in advance of the potential switchover to the new IFRS for SMEs proposed by the Accounting Standards Board.  Both initiatives will significantly impact smaller companies and if the eFiling project is delayed such that it runs into the ASB project to replace UK GAAP then it potentially threatens to overwhelm some small company accountants.  At the moment there is no indication that the eFiling project is slipping - let's hope that this doesn't change.

As mentioned above, FEE has just issued a short paper on XBRL which usefully summarises the project to date, explains some of the technical jargon and highlights the impact on the accountant (and auditor, if you are interested).  The paper can be downloaded free of charge from the FEE website