XBRL

XBRL is a language for the electronic communication of business and financial data which is revolutionising business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

XBRL stands for eXtensible Business Reporting Language. It is one of a family of “XML” languages which is becoming a standard means of communicating information between businesses and on the internet. XBRL is being developed by an international non-profit consortium of approximately 450 major companies, organisations and government agencies.

It is an open standard, free of licence fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. The idea behind XBRL, eXtensible Business Reporting Language, is simple. Instead of treating financial information as a block of text – as in a standard internet page or a printed document – it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag.

The introduction of XBRL tags enables automated processing of business information by computer software, cutting out
laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data “intelligently”: they can recognise the information in a XBRL document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.

Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyse data much more rapidly and efficiently if it is in XBRL format.

XBRL can handle data in different languages and accounting standards. It can flexibly be adapted to meet different requirements and uses. Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software.

Many organizations have been looking to the internet to bring the long-heralded promises of “better, faster, cheaper” data to organizational decision-making, and specifically to business and financial reporting. An emerging technology standard, eXtensible Business Reporting Language (XBRL), promises to web-enable the financial reporting process for both preparers and consumers.

Instead of treating financial information as a block of text, XBRL provides a computer-readable tag to identify each individual item of data. By attaching identifying tags to individual pieces of data, a business reporting document becomes “intelligent” data, allowing the exchange of business reporting data by encoding the information in a meaningful way.

Computer applications can use the XBRL data to recognize the information in an XBRL document – selecting, analyzing, storing, and exchanging it with other computers and present it in a variety of ways for users. As companies review their business reporting disclosure controls and procedures and begin to comply with new filing requirements, XBRL is becoming the chosen tool to help facilitate and restore confidence in business reporting and in turn, to communicate accurately the value of the company.

XBRL is:

• An open technology standard for reporting and analyzing business and financial information
• Software agnostic, or independent
• Accounting framework neutral

XBRL is not:

• A standardized chart of accounts
• A way to require the reporting of specific information
• A transaction level activity (although it can summarize general ledger transactions)

KPMG says

XBRL can be viewed as a system of bar codes for financial statements. It allows companies to use nationally and internationally common ‘tags’ to identify individual reporting concepts that exist in a corporate report. Information that is coded in this way can be instantly and accurately exchanged between systems. How does this work? XBRL allows context to be communicated along with content.

XBRL facilitates the communication of entire reports, avoiding ‘template reporting’, which can be misleading and inaccurate. Where aspects of a particular business demand unique tags, report owners can create them, communicating the definition of a concept as well as its relationship to other parts of a report. In other words, there is no need to force a reporting concept into an ill-fitting box. XBRL is not a standard chart of accounts. It allows the standardization of common business reporting concepts while providing flexibility to extend the vocabulary to meet individual circumstances.

Companies can use XBRL as a universal exchange format to streamline and improve internal corporate reporting as well as to communicate with external business information users. Increasingly, we are seeing XBRL adopted as the format of choice for corporate reporting.

Because XBRL is based on core internet technologies, it is possible to search across XBRL documents and extract individual concepts that might be needed for particular types of analysis. It is also possible to transform XBRL reports into any other format, including those more commonly used such as HTML and PDF.

Altova says

Extensible Business Reporting Language (XBRL) is an XML-based markup language for electronic transmission of business and financial data. With a brand new mandate from the United States Securities and Exchange Commission (SEC), and official support from European Parliament as well as the governments of Japan and China, XBRL aims to reduce costs through the elimination of time consuming and error-prone human interaction. The introduction of XBRL tags allows computers to process information independently, thus increasing the speed of data integration and exchange, while at the same time virtually eliminating data redundancy and quality issues.

XBRL adoption gives companies the opportunity to introduce new efficiencies into their financial reporting workflow, preventing redundant tasks by automating data extraction and increasing accuracy through the validation of both syntax and semantics.

EDGAR says

XBRL (Extensible Business Reporting Language) is a technology standard that can be applied to the creation of financial statement data and other reporting situations. It is used for the reporting of business and financial information and can make the process of creating, distributing, reporting and analyzing information more efficient and effective.

XBRL is an application of XML to business information and uses tags or structure to describe the data, making it immediately reusable, interactive and intelligent. It is also “extensible” so it can be customized for unique situations and reporting concepts.

XBRL is NOT an accounting standard although it can be used to represent reporting concepts and provide an explicit link from a reported concept to the relevant accounting standard. XBRL is NOT a software program although it can be used to enable the seamless exchange of information between disparate software applications.

XBRL data is more robust, accurate, and transparent than data in financial statements that appears in legacy electronic and paper reports. Here’s why: in an XBRL financial report, each piece of data (both numbers and text) is given a unique ID, based on standardized lists of accounting terms, or taxonomies. For example, a data point of $200,000 might be linked to the accounting terms “U.S. Dollars,” “Net Profit”, “2nd Quarter” “2006″. Once data is tagged, it is computer-readable. It can be identified, verified, extracted, and reused. The tags remains connected to the data, so even when the data is used in other XBRL software, it can still be understood in its original context.

XBRL tags both numbers and textual information, which means not only balance statements, but information such as statement of principals and even footprints, appendices, and updates, is accounted for, to aid in internal audits and external research and analysis