Financial Reporting
It's just a matter of time before Hong Kong companies use technology-based XBRL system
The mainland was one of the first countries in the world to adopt a technology-based financial reporting system.
Known as XBRL, or eXtensible Business Reporting Language, the system provides a computer readable structure where companies can tell their own financial story to the market without using standard reporting templates. Last year, the Chinese Securities Regulatory Commission (CSRC), which governs the Shanghai and Shenzhen Stock Exchanges, mandated XBRL reporting. CSRC now receives XBRL filings from more than 1,400 public companies.
Gayle Donohue, assurance partner at PricewaterhouseCoopers, said the development of XBRL in the mainland was of particular relevance to Hong Kong's business and accounting community.
'If the mainland continues to encourage and mandate the use of XBRL, it could become a key driver towards XBRL becoming widely used in Hong Kong,' she said.
In 2005, the Hong Kong Securities and Futures Commission established a preparatory working group to examine the development of XBRL, which is being used in Australia, Japan, Singapore, the United States and Britain.
'We know this is coming, it is just a matter of when,' said David Phillips, a senior assurance partner at PricewaterhouseCoopers.
Patrick Rozario, principle with Grant Thornton Business Risk Services, said while some companies understood the potential value of XBRL, it was the regulators who had made the first concerted move to introduce it. He said by presenting its statements in XBRL format, a company could benefit investors.
It can also help meet requirements of regulators, lenders and other consumers of financial information, who are increasingly demanding greater reporting transparency.
