| Section Four: What is XBRL?
XBRL (Extensible Business Reporting Language), is a freely available XML-based specification that uses accepted financial reporting standards and practices to exchange financial statements across all software and technologies, including the Internet. It is an XML-based framework that provides the financial community a standards-based method to prepare, publish in a variety of formats, reliably extract and automatically exchange financial statements of publicly held companies. XBRL is not about establishing new accounting standards but enhancing the usability of the ones that we have through the digital language of business, XML.
XBRL could also be described as a computer programming add-on that tags each segment of computerized business information with an identification code or marker. In most cases, accounting software will insert XBRL tags automatically. If an accounting system lacks XBRL, a user can still add XBRL tags to financial information using an add-on program or customized software tagging tools.
According to Robert Elliot, Chairman of the AICPA, "XBRL solves two significant problems for users and preparers of financial statements by providing efficient preparation and reliable extraction of financial data across all technology formats, including the Internet. Costs to implement XBRL will be minimal for CPA firms and their clients since it will be built into software technology and operating procedures, allowing increased flexibility to prepare and extract statements according to the accounting principles of different geographies and jurisdictions."
XBRL works by taking company business reporting data, mapping the structure of the information to XBRL for financial statements, and creating any additional tags needed to render a full set of financial statements. The result of the process is an additional identifier attached to each piece of business data that can provide clues at to its origin, its relationship to other data, the rules used to prepare the information and more.
The May 1999 edition of the Journal of Accountancy carried an article titled "The XML Files".(1) The article explains the universal appeal of using an XML-based markup language, such as XBRL.
"XML is about having one universal way to exchange data, rather than hundreds of different ways. XML is both easy to understand and capable of the most sophisticated data-management tasks."
Companies who publish business reporting information coded in XBRL will be creating a means for communicating their data to a universal audience. This can be accomplished because XBRL is designed to be a specification that is the same for all companies and is consistent from one financial statement to another.
For a comprehensive listing of most XBRL company press releases, see Robin Cover's Cover pages, located at http://xml.coverpages.org/xbrl.html
Navision Software announced on August 2, 2000 that they were shipping version 2.50 of Navision Financials software, which includes an XBRL solution. Here is the press release:
[August 02, 2000] "Navision Software Releases XBRL Solution; XML-Based Financial Reporting Language Now Available in Navision Financials 2.50." - "Navision Software, a leading worldwide provider of business management solutions to the middle market, announced today that it has released its XBRL solution, one day after the publication of the official XML-based taxonomy. XBRL (eXtensible Business Reporting Language) is a free specification that first appeared on the financial and accounting scene in October of 1999. It uses a financial reporting specification, agreed upon by key members of the financial information supply chain, that allows an open exchange of financial reporting data across all software and technologies, including the Internet. The XBRL coding contained in Navision Financials 2.50 will enable customers to more easily and efficiently connect and communicate with both competing products in the ERP space and complementary products such as Caseware. For example, a set of subsidiary offices using Navision Financials can now more quickly collaborate with a parent office using a larger ERP system, while realizing significant time and cost savings. XBRL offers several key benefits: technology independence, full interoperability, efficient preparation of financial statements and reliable extraction of financial information. Information is entered only once, allowing that same information to be rendered in any form, such as a printed financial statement, an HTML document for the company's Web site, an EDGAR filing document with the SEC, a raw XML file or other specialized reporting formats, such as credit reports or loan documents. More than 80 percent of major US public companies provide some type of financial disclosure on the Internet. Investors and users of the Internet need accurate and reliable financial information that can be delivered promptly to help them make informed financial decisions." See XBRL Taxonomy - "Taxonomy for the creation of XML-based instance documents for business and financial reporting of commercial and industrial companies according to US GAAP."
Articles for further Study:
The Future of Financial Reporting, an online interview with XBRL Steering Committee chairman Mike Willis.
Finally, Business Talks the Same Language, BY STANLEY ZAROWIN AND WAYNE E. HARDING A journal of Accountancy article which nicely lays out both the mechanics and the strategic importance for using XBRL for financial reporting.
Financial-Flavored XML Takes Shape, by Paula Shaki Trimble. An article from the June Federal Computer Week. Quote from the article: "The federal version of XBRL for Financial Statements the first XBRL product will use the Office of Management and Budget form and content guidelines to appropriately tag reports."
Copyright © 2008 Saeed Roohani, XBRL Education