Trade gets a whole new language and image

Q&A on Extensible Business Reporting Language which the Abu Dhabi Securities Exchange hopes to introduce for stocks by the end of the year.

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The Abu Dhabi Securities Exchange (ADX) hopes to introduce Extensible Business Reporting Language (XBRL) for stocks by the end of the year after four years of consultation. q What is XBRL? a XBRL is a computer code that enables users to identify or "tag" financial data. Tags are like bar codes attached to specific pieces of data, making it easier to search and analyse. What are the benefits? It helps investors make decisions about which shares to buy or sell, and regulators and auditors uncover any irregularities in companies' financial statements. "This program is able to standardise the information, translate the information into several languages, and allows the trader to even compare companies against other companies and sector by sector," says Rashed al Baloushi, the deputy director of the ADX and chairman of the UAE's XBRL steering committee. XBRL should make it easier for foreign investors to research local companies, eventually leading to increased foreign investment.

Where else is it used? XBRL is already prominent in Europe, but in the US the language has faced resistance from companies failing to adopt the new standard. The results of a study by Grant Thornton's professional standards group this year showed a third of surveyed companies had no plans to comply, despite the US Securities and Exchange Commission's deadline for the middle of next year. Some companies argue that the complexity of tagging the statements could lead to errors. In the UAE, the ADX has already found several listed companies already excited to be part of the pilot program before it is officially implemented.

halsayegh@thenational.ae