CRITICISM has been levelled at international accounting standards claiming they do not fit with new technology to aid financial reporting.
The warning comes from Mike Starr, chief accountant at the SEC, the US financial watchdog, who claims International Financial Reporting Standards are too limited to use the new highlighting tool – XBRL, Reuters reports.
The technology is designed to automatically highlight key information contained in financial reports and tax filings. It allows financial information to be “tagged” with digital markers so returns can be made online in a standardised format.
However, Starr said there is still “concern about the adequacy of IFRS” information highlighted by XBRL, resulting in reports that are not standardised.
He believes the information is more limited than the US’ own GAAP reporting style.
Hans Hoogervorst, incoming chairman of the International Accounting Standards Board, which works on IFRS rules, said proposals due in April will increase information that can be tagged.
“I am hopeful we can address the problems the SEC is seeing and hopefully the use of IFRS taxonomy can be allowed. A lot of these problems will be solved,” Hoogervorst said.
Currently about 1,500 US companies file using XBRL with a further 8,000 to be added in June when it will become mandatory for listed companies.
The SEC has refused to allow companies filing in IFRS to use XBRL.
The UK has required all corporation tax to be submitted in a newer version of the technology, iXBRL (inline eXtensible Business Reporting Language), by 1 April 2011.