Comparability

Comparability for IFRS Companies Will Grow up.

The IFRS Foundation has heard from constituents who are concerned that the current IFRS taxonomy may be challenging to use because it contains so few tags when compared with the U.S. GAAP Taxonomy. The IFRS taxonomy contains some 2,550 elements while the GAAP taxonomy contains about 13,000.

The key difference is that GAAP is more prescriptive, so there are more specific requirements that can be described by more detailed, more precisely defined tags. IFRS is based more on principles than prescriptive requirements, so it’s simply not as straightforward to establish precise tags for every conceivable way companies might elect to report something.

The Foundation’s XBRL team studied the financial statements of about 200 companies that report under IFRS in countries and industries throughout the world, identifying disclosures that are most common among those companies.

The IFRS taxonomy is continuously updated to reflect changes in accounting standards as they are released by the IASB. This assures companies referring to the taxonomy can be confident they reflect the latest IFRSs as they are issued and become requirements for IFRS filers. This is important given how dispersed IFRS filers and XBRL filers are around the globe. To date, some 120 countries have adopted IFRS, and about 25 of those countries are now using or implementing the IFRS taxonomy for XBRL filings.

It will be important for the IFRS Foundation to receive broad feedback to the taxonomy’s interim release to assure it accurately reflects the reporting practices most common among IFRS filers. This is the only way to assure the greatest comparability possible, which is essentially if XBRL is to truly become a useful reporting platform.

Publish July 19,2011

Leonardo Blanco Barquero

1-1321-0820