The case for Unique Product, Entity and Transaction Identifiers
The retail industry was revolutionized in terms of data collection at point of sale by the introduction of the bar code. By assigning unique codes to each stock-keeping unit (SKU) in inventory, it was possible to collect a lot of data on sales and build meaningful aggregated sales trends analyses.
The financial industry would benefit hugely from the use of such unique identifiers for financial transactions. The Legal Entity Identifier has already found widespread acceptance. Along with UPI and UTI, it holds the potential to revolutionize data collection on financial transactions. Read more http://marketsmedia.com/updating-progress-on-the-barcodes-of-finance/
A Glimpse into the SEC’s vision for the near future
In a wonderful speech at the 34th Annual Current Financial Reporting Issues Conference held in New York this Monday, 16th Nov, 2015 the SEC’s Commissioner, Mr. Michael S. Piwowar brought the discussion home to three topics that interest the SEC currently.
Although the FASB and the IASB have worked pretty hard and made good progress on convergence of US GAAP and IFRS, they are still two pretty different accounting standards. No one truly wants an additional disclosure and so, the SEC may, at best, ask for an additional disclosure in IFRS without reconciliation.
Although very few people seem to be using corporate financial data of small companies and the benefits that these small companies accrue from such disclosure is disproportionately low compared to the resources and effort they put in, such data is useful in consolidated analysis of the industry/economy. Therefore, iXBRL is important and the SEC will make efforts to reduce the cost burden on these smaller companies. However, this can be done only after EDGAR is amended to accommodate XHTML files and it would have to be voluntary and as an add-on.
A blurred definition of materiality – what is important to a shareholder or prospective shareholder – has led to a burgeoning of disclosure requirements that is unnecessary and detracts from the usefulness of the data as a whole. Proximity to useless data often causes useful data to be ignored by shareholders. The Dodd-Frank Act was specially picked out by Mr. Piwowar as an example of a disclosure requirement that serves various special groups instead of a reasonable investor.
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