The adoption of eXtensible Business Reporting Language (XBRL) for financial reporting holds great promise as a source of efficiency, transparency, and mparability in the delivery of financial information. XBRL provides a standardized, interactive, mputer-based framework for financial reporting and offers clear advantages to filers, investors, and regulators. CFA Institute supports the initiative enthusiastically.

Many challenges, however, impede the suessful implementation of XBRL. Chief among these challenges is the ability of the managers of filing mpanies to manipulate or “work around” reporting by customizing or “extending” the re dictionary of fields (that is, the taxonomy or classification) of the reporting format. If mpanies extend the defined fields excessively, the platform will lose the vitally important benefit of mparability.

Regulators in several capital markets, including China, Japan, and the United States, already have mandated XBRL-formatted reporting. As XBRL is adopted globally, regulators will be challenged to develop and maintain reporting field lists that are broad enough to be both useful and meaningful for the full spectrum of mpany filers. Specifically, regulators will have to develop reporting approaches that are neither so broad that they enurage (undue) user work-arounds nor so rigid that they fail to capture the essence of a mpany’s financial standing.

The CFA Institute Centre for Financial Market Integrity has generated a series of guiding principles for the development of an effective and appropriately elastic XBRL framework. These five principles are based on preferences CFA Institute members revealed in recent surveys and research nducted by the Centre’s volunteer XBRL working group. The remmendations include the development of regulation-based re taxonomies that are applicable to the variety of industries involved but also limit customization. We also enurage maximum mparability, full adoption of XBRL, and free aess for the general public. Finally, the principles enurage regulators to inrporate XBRL into their updating processes as acunting and reporting standards evolve.

Fully inrporating XBRL into all aspects of rporate disclosure—whether financial reporting, sustainability, or rporate actions—will require the mbined efforts of the public and private sectors. eXtensible Business Reporting Language: A Guide for Investors introduces some of the expectations and challenges to be nsidered as regulatory mandates for XBRL reporting increase, and it offers a general overview of XBRL reporting and a mplete discussion of our remmended principles. Details about some portions of our XBRL survey are in Appendix A, and information about the metadata in the taxonomy (information that adds a layer of detail to the data) is in Appendix B at the end of this report. The Centre’s web, /centre, provides additional resources, and the approved U.S. GAAP taxonomy is available for download from the XBRL US web, .