Extensible Business Reporting Language

Extensible Business Reporting Language (XBRL)

The Securities and Exchange Commission (SEC) is responsible for monitoring financial aspects of businesses in the U.S. to protect investors and maintain fair, orderly, and efficient markets. The SEC collects and publishes financial data by firms, including annual reports, balance sheets, and income statements. The commission has required firms to submit data electronically for several years. In 2011, the commission moved to require most companies to submit data using a new standard: extensible business reporting language (XBRL). XBRL is largely anXML-based system for tagging specific financial data.

The accounting discipline has been around much longer than computers have. Although one goal of accounting is to create standardized views of company performance, accountants and companies have evolved different terms over time.For example, revenue, earnings, and income are all terms that have been used to represent the same concept, and any financial document might use variations of

these terms. These differences make it difficult for computers to read and extract data from financial statements—even if they are in HTML or other digital format. XBRL is designed to encourage accountants to tag all of the data in a statement with a standardized name so that it can be retrieved electronically.

Of course, financial reports are more complex than just lists of numbers. For example, they include footnotes and descriptions. And even the data contains other attributes such as the time period and currency. XBRL has tags and options to handle most of these issues. Figure 6.11 shows a simple example of a tag that isused to display the Revenue for a specified year. This tag can be embedded in a typical XHTML document which can handle the overall layout and formatting.

The attributes on the <ix … > tag provide the type of data (name=”ifrs:Revenue”),the units or currency “EUR”, and the actual data to display (6,863,545).Unlike typical XML, XBRL is not designed for transferring transaction or EDI data. Instead, the tags are defined specifically for reporting summary data. Yet,this data is increasingly used by many people: investors, banks, fraud investigators, and so on.

From XBRL.org

XBRL is the open international standard for digital business reporting, managed by a global not for profit consortium, XBRL International. We are committed to improving reporting in the public interest. XBRL is used around the world, in more than 50 countries. Millions of XBRL documents are created every year, replacing older, paper-based reports with more useful, more effective and more accurate digital versions allowing the exchange of summary business reports, like financial statements, and risk and performance reports.

In a nutshell, XBRL provides a language in which reporting terms can be authoritatively defined. Those terms can then be used to uniquely represent the contents of financial statements or other kinds of compliance, performance and business reports. XBRL lets reporting information move between organisations rapidly, accurately and digitally.