WICI, the World's Business Reporting Network, Releases Framework and XBRL Taxonomy to Promote Quality and Transparency in Business Reporting

WASHINGTON--(BUSINESS WIRE)--WICI, the world’s business reporting network, today announced that it has released its first version of a comprehensive information framework and XBRL taxonomy to help companies better communicate with their investors and other stakeholders about business strategy and performance. WICI also called for public comments from the business reporting community on the framework and taxonomy.

“Studies have found that only 25 percent of a company’s market value can be attributed to accounting book value, with the remaining 75 percent based on an assessment of value created by intangibles such as strategy, product innovation, people and customer loyalty”

WICI-Japan and the Enhanced Business Reporting Consortium (EBRC), the U.S. member of WICI, collaborated to develop the WICI Framework Version 1.0. The Enhanced Business Reporting Framework and the Japan Ministry of Economy, Trade and Industry Guidelines for Intellectual Asset-based Management are the foundation for the WICI Framework. In addition, JustSystems assisted WICI-Japan and PricewaterhouseCoopers collaborated with the EBRC to develop XBRL taxonomies for the WICI Framework.

“During the last 15 years, several organizations have proposed new or improved reporting models—but none so far has succeeded in gaining recognition as a common, complete framework that would allow for consistent and relevant reporting of value drivers, non-financial performance measures and qualitative information,” said Mike Krzus, a partner with Grant Thornton LLP and the president of the EBRC. “The WICI Framework is the first step towards development of an internationally recognized, voluntary framework for providing the information that investors and others need. Our next step is to fully engage shareholders, directors, management and other stakeholders around the world.”

To make successful decisions, management and investors need information about the key elements of a company’s business that are the sources of its value. These can be measured numerically through financial or non-financial key performance indicators or they may be qualitative factors such as business opportunities, risks, strategies and plans—all of which permit assessment of the quality, sustainability and variability of a company’s cash flows and earnings.

“Studies have found that only 25 percent of a company’s market value can be attributed to accounting book value, with the remaining 75 percent based on an assessment of value created by intangibles such as strategy, product innovation, people and customer loyalty,” said Robert Eccles of the Harvard Business School. “Unfortunately, only about one-third of the value drivers generally associated with the industry sectors surveyed are published in formal filings used by investors.”

“The WICI Framework can change the markets’ focus on short-term earnings projections,” said Eccles. “The over-emphasis of quarterly earnings will decline as companies report transparently on their key drivers of value creation. The long-term rewards will be tangible: a greater investor following, lower stock-price volatility and ultimately a more attractive cost of equity and debt. Today’s crisis in the financial markets once again shows the importance of investors having the right information. They are going to increasingly demand it and companies, in their own self-interest, are going to increasingly provide it.”

“We distribute this framework as an invitation for global collaboration,” said Krzus. “We look forward to candid and spirited dialogue to build upon this foundation.”

In addition, the EBRC has developed and will soon publish for comment a taxonomy for U.S. SEC Management’s Discussion and Analysis that supplements the existing MD&A taxonomy.

The WICI Framework and taxonomy and the EBRC’s MD&A taxonomy will be available at www.worldici.com.

About the WICI

WICI was formed in late 2007 as a private/public sector collaboration. Organizations recognized as the Promoting Parties of WICI are:

Enhanced Business Reporting Consortium, which was founded by American Institute of Certified Public Accountants, Grant Thornton LLP, Microsoft Corporation and PricewaterhouseCoopers LLP
European Federation of Financial Analysts Societies
Japanese Ministry of Economy, Trade and Industry
Organization for Economic Cooperation and Development
Society for Knowledge Economics
University of Ferrara
Waseda University