Subject: File No. S7-36-04
From: Simon M Ingall, ACA
Affiliation: Head, Group Accounting Policies, the Royal Dutch/Shell Group

November 15, 2004


Tagging has the potential to provide greater transparency with lower perceived risk for investors. If implemented in a standard way, tagging will reduce the effort for consumers of the information to process/review filed returns. In particular it will improve data capture and offer enhanced capability to make comparisons across companies. This facilitates but does not guarantee more rigorous analysis and comparison of companies.

The cost of tagging to the producer of the data may be offset to some extent by automatic production of published financial information in a variety of formats and on a variety of media. It may also improve integrity or lower the cost of ensuring integrity in the published material. However it requires that the XBRL tagging schemes cover all of the required published information.

Implications for registrants

Generation of XBRL tagging is an additional cost without a clear internal benefit for filers. The nature of XBRL is that the taxonomy addresses reporting/filing requirements but cannot cover all the information required by a complex, commercial organisation. Therefore the generation of XBRL tagging will tend to be at the periphery of the organisations systems and so an additional activity rather than an integral part of business processes

Companies must be able to deal with multiple taxonomies that evolve independently of each other. A number of taxonomies are being developed to address particular segments of business activity and jurisdictions. It is not clear that these can form a coherent overall framework, and certainly not in a timely manner. Therefore businesses must anticipate dealing with multiple taxonomies. This requires that software tools able to support this are available, are cost-effective, and companies have had time to implement them before use of XBRL is mandated.

Adequacy of XBRL

XML is the right starting point for tagging and XBRL adds additional structure and context to the information that makes it more accessible and facilitates rapid analysis. Problems could arise from delays in the mechanism to agree XBRL standards and further enhancements to them as accounting and reporting requirements evolve.

There should be a clear role for regulators globally such as the SEC to ensure XBRL standards properly reflect the filing rules. Such bodies are are focused on the reporting rules with the development of the supporting XBRL standard being carried out by a private consortium. It will not be acceptable if, for example, any rule changes are not reflected in the XBRL standard or cannot be implemented in a timely manner.