The House Bills encourage XBRL use

The House passed two bills in early December 2009 with provisions related to the use of XBRL (eXtensible Business Reporting Language). The SEC currently requires the largest accelerated filers to file an XBRL exhibit with their annual 10-K and quarterly 10-Q’s. Remaining SEC filers will be required to file the XBRL exhibits beginning in 2010 and 2011.

The Government Information Transparency Act (H.R. 2392) will require federal agencies to collect their data in a uniform, searchable format using XBRL thereby simplifying mandatory financial reporting for companies that receive federal funds. The bill calls on the White House to issue rules within 18 months that direct every agency to use XBRL. It would also require companies to file activity reports to agencies in XBRL and require agencies to make the reported financial information viewable by the public.

H.R. 4173, the Wall Street Reform and Consumer Protection Act, also encourages the use of XBRL. The bill makes it easier to scrutinize complex financial results filed by public companies with government regulators such as the SEC and banking regulators. According to the legislation, financial market regulators must report to Congress for each of the next five years on how they are “encouraging the use and acceptance of interactive data” to increase transparency in financial reporting.

XBRL linking with codification

The FASB Codification and XBRL have recently conjoined within the Codification website. The FASB says that some XBRL elements are now electronically linked into the Codification. The Codification now provides a list of the XBRL links to the paragraphs in the Codification. For an example see ASC 840-10-75. The FASB’s Notice to Constituents provides further details about the references to XBRL imbedded within the Codification.

“The new XBRL functionality provided by the Codification website will help entities as they prepare or plan to prepare XBRL financial statements using the U.S. Financial Reporting Taxonomy,” states FASB Chairman Robert Herz. “Users will be able to very easily identify the XBRL elements associated with specific Codification paragraphs.”

XBRL US announced previously that it had released two XBRL taxonomies that link to the Codification to assist users as they verify that they have reported their transactions according to current US GAAP pursuant to the FASB Codification.

XBRL 2.1 version is out with corrections and new features

The XBRL International Domain Working Group developed a detailed set of requirements which were then implemented by the XBRL International Specification Working Group. The conformance suite consists of over 250 example taxonomy fragments (XML Schema and XLink files) and instance documents, containing both valid and invalid usage.  It will help application developers ensure their software processes XBRL correctly.

 It is expected from taxonomy authors gradually to upgrade their taxonomies to 2.1.  This is a prerequisite for conformance with the Financial Reporting Taxonomies Architecture (FRTA) 1.0.  However, 2.0 versions of these taxonomies may also be made available at the discretion of the taxonomy authors.

Domain experts and application developers can now encode more precise information about financial reporting concepts in XBRL taxonomies.  They can also define the handling of new relationships not defined by XBRL itself.  New relationships allow taxonomy authors to connect taxonomy definitions to authoritative definitions and other supporting documentation.

There have always been restrictions on what are a meaningful taxonomy schema, meaningful linkbase, and meaningful instances.  In the past many of these criteria were implicit. These criteria are now part of the specification.  In some cases, they may be enforced using XML Schema, requiring no new code to be written, and in other cases the specification enables vendors to write correct validation code.  Examples of these technical enhancements include:  A detailed exposition of handling variable precision numbers, prohibitions on certain kinds of loops in relationships, and prohibition of duplicated data in instances.  The meaning of calculation links and their ability to express relationships between items in different tuples has been specified precisely.

How can companies benefit from adopting XBRL

XBRL increases the usability of financial statement information.  The need to re-key financial data for analytical and other purposes can be eliminated.  By presenting its statements in XBRL, a company can benefit investors and raise its profile.  It will also meet the requirements of regulators, lenders and others consumers of financial information, who are increasingly demanding reporting in XBRL.  This will improve business relations and lead to a range of benefits.


With full adoption of XBRL, companies can automate data collection. For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently.  Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort.  A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders.  Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy.

F.A.F. maintains XBRL taxonomy for GAAP

The Financial Accounting Foundation (FAF) recently announced its new responsibility for the ongoing maintenance of the U.S. GAAP Financial Reporting Taxonomy applicable to public issuers registered with the U.S. Securities and Exchange Commission (SEC). The FAF and Financial Accounting Standards Board (FASB) will assemble a small team of technical staff dedicated to maintaining the taxonomy and will work towards the release of the next taxonomy update in early 2011. Today’s announcement is the culmination of several months of discussions between the FAF and the staff of the SEC. 

The U.S. GAAP Financial Reporting Taxonomy is a list of computer-readable tags in extensible Business Reporting Language (XBRL) that allows companies to label precisely the thousands of pieces of financial data that are included in typical long-form financial statements and related footnote disclosures. The tags allow computers to automatically search for and assemble data so it can be readily accessed and analyzed by investors, analysts, journalists, and the SEC staff. 

FAF Chairman Jack Brennan stated, “The FASB team assigned to taxonomy maintenance will work closely with the SEC, investors, issuers, accounting firms, and other stakeholders to develop updates that are of the highest quality.” 

The FAF’s maintenance activities will be focused on updating the taxonomy for changes in U.S. GAAP, best practices in taxonomy extensions, and technical enhancements.

Taxonomies

Taxonomies are the reporting-area specific hierarchical dictionaries used by the XBRL community. They define the specific tags that are used for individual items of data (such as "net profit"), their attributes and their interrelationships. Different taxonomies will be required for different business reporting purposes. Some national jurisdictions may need their own reporting taxonomies to reflect local accounting and other reporting regulations. Many different organizations, including regulators, specific industries or even companies, may require taxonomies or taxonomy extensions to cover their own specific business reporting needs. Taxonomies which have been officially recognized by XBRL International are listed under the "XII Recognized Taxonomies" tab. Details on how the taxonomy recognition process operates along with instructions on submitting taxonomies can be found under the "Taxonomies Recognition Process" tab. A special taxonomy developed and recommended by XII itself has also been designed to support collation of detailed, drill-down data focusing on internal reporting within organizations. This is the Global Ledger taxonomy.

Elements included in the XBRL

One of the best ways to get to know a new metadata scheme is to dive in and look at the specific elements. XBRL is simply not that simple. XBRL is more than just a metadata scheme. It is a framework for developing standardized taxonomies that can be used to create metadata for specific business reporting needs. So before we look at elements, we have to understand the basic structure of XBRL.

XBRL consists of the following:
-Instance document. This is the actual XBRL marked-up document.
-Taxonomies. Basically a document of concept definitions, or a dictionary. In terms of metadata terminology we used in class, the taxonomy document provides the semantics for a particular XBRL instance document. The taxonomies also define hierarchies of concepts. If necessary, taxonomy could describe one item in more than one language. The taxonomy itself is extensible, that is, a user can split one item into two different items (i.e., instead of just "sales," “equipment sales” and “consumables sales” could be used).
-Linkbases. Unlike the taxonomies which define the elements (called "items" in XBRL), linkbases are documents that define various relationships between items. The five types of linkbases are reference, label, definition, calculation, and presentation.
The instant document, taxonomies and linkbases are all connected using an XML linking standard called xlink

XBRL22 will be held on May 17-19, 2011 in Belgium

XBRL22, the next global gathering of tax authorities, securities commissioners, banking supervisors, corporate executives, accountants and technology vendors, will take place in Brussels, Belgium, May 17- 19, 2011.

With a theme of “Sharing Economic Information in a Global World,” XBRL22 will focus on the use of XBRL tagged data for performance measurement, business intelligence, management reporting, investment management, and regulatory oversight. “With XBRL International’s recent launch of an abstract model working group, we ultimately hope to catalyze greater development of software tools that can gather and analyze XBRL formatted information,” added Mr. Fragnito.

“The abstract model lays a solid foundation for software architects, engineers and developers to expand XBRL tools by creating a common specification blueprint, ultimately lowering development costs for solutions, project implementation, users and reporting entities.”

XBRL is expanding globally

NEW YORK, NY, NOVEMBER 9, 2010 – The release of a national General Purpose XBRL Taxonomy by the China Ministry of Finance last month during XBRL21 mandates XBRL across banking, insurance, capital markets, taxation and audit in China. This represents the largest scale integration of the standard to date in the world, building upon a steadily increasing series of regulatory requirements to use XBRL in Japan, U.S., Australia, U.K., many EU member states and others for tax, annual accounts, corporate financials, mutual funds and standard business reporting.

“Governments and tax authorities are increasingly recognizing the power and value of XBRL in

Streamlining the gathering of information from the public and businesses and sharing that information across agencies efficiently and cost-effectively,” said Anthony Fragnito, CPA, CEO of XBRL International, Inc. “The reduced burden on governments using XBRL is substantial, as we have seen with the SBR programs in Australia and the Netherlands. Ireland’s Revenue Commission recently announced that it is planning to use XBRL for tax reporting; The U.K. HMRC requirement for tax reporting using the inline XBRL standard goes into effect next April; Germany, Denmark and other countries are also using XBRL for tax reporting. In total, millions of listed and privately held companies are using XBRL today for tax reporting. Look beyond that to XBRL requirements for listed companies, and the market is now seeing financial information in XBRL format from companies representing more than 75% of the world’s total market capitalization.”

An XBRL taxonomy developed by SWIFT, DTCC and XBRL U.S. for corporate actions was also presented during XBRL21 and is projected to save more than $900 million for organizations reporting and receiving billions of corporate actions transactions annually in the U.S. alone. “I expect to see increasing interest from other countries in the use of XBRL for corporate actions given the projected cost-savings, the improvement in accuracy, and the efficiency in analyzing important corporate communications to investors,” added Mr. Fragnito.

XBRL and internal auditors (part 2)

There are also many opportunities for internal auditors when an organization tags the US GAAP Taxonomy deeply into its business and financial systems. Imaging that an organization tags XBRL into its ERP at the general ledger account and cost center level. Those XBRL tags could be utilized to feed financial data to a variety of systems such as consolidation and financial reporting software, tax software and regulatory reporting software. In addition, internal auditors could utilize the XBRL data tags to:

·         Move from statistical sampling of financial information to performing 100% testing by utilizing Excel, Access or similar desktop software.

·         Eliminate or reduce manual intervention and provide strengthened ability to centralize controls, processes and performance standards thereby reducing risk

·         Providing reliable, consistent and electronically available information that allows internal audit to develop standardized, shareable and electronically executable internal audit programs.

·         Increase the ability to enforce controls and provide analytics that can be persistently shared for communication and collaboration with internal and external stakeholders, including external auditors

Have you limited the potential of XBRL in your organization? Is accounting and finance the only function involved in your XBRL process? Consider the longer term impact and benefit of XBRL. Now could be the time for you to involve your internal audit, information technology and tax functions to maximize the benefits of XBRL within your organization.

XBRL and internal auditors (part 1)

XBRL in the United States is currently most visible in regulatory reporting to the SEC. Many organizations have assigned the responsibility for XBRL to the financial reporting department, but is that the only area that should be involved? Is there a role for internal auditors in complying with SEC XBRL requirements and utilizing XBRL to gain internal reporting efficiencies? Let’s explore the internal auditor’s potential role in XBRL.

The management of an organization is responsible for ensuring that accurate and complete financial statements are produced. In this context, management is also responsible for XBRL formatted financial statement accuracy and completeness. The internal auditor can play an important role in providing some oversight to the XBRL financial statement preparation process including:

·         Providing comfort that internal controls over the XBRL process are adequate

·         Validating that business and financial data is tagged to appropriate US GAAP Taxonomy elements

·         Confirming that XBRL rendered financial statements are proper and agree with printed financial statements

·         Verifying that the SEC’s XBRL filing requirements are met

Advantages and Disadvantages of XBRL (continue)

The Disadvantages of XBRL

XBRL facilitates near real-time disclosure. The potential to quickly report information in automated ways is a double edged sword. On the one hand, near real-time disclosure improves transparency and sharing of information for a variety of beneficial purposes. On the other hand, near real-time disclosure may emphasize short-term results at the expense of long-term objectives. Some argue that financial information shared in a real-time way may cause undue volatility in stock prices and impulsive decisions by investors, suppliers, customers and business managers.

XBRL increases the potential for error. Many cite the potential for errors and inconsistencies as a major disadvantage. If companies select the wrong tag from a taxonomy (for example the US GAAP Taxonomy or “UGT”) then users of that information would rely on the incorrect information. This is a concern during implementation as companies begin to select  UGT elements for the first time, but the UGT ”tags” chosen by companies will improve over time as XBRL users learn how to select the best UGT elements to represent their information. In addition, the SEC will review XBRL exhibits and make comments where they believe corrections should be made. Since XBRL persists from period to period, electronic reporting accuracy should improve over time.

XBRL may increase information abuse. In an information age where dishonest people are electronically enabled, abuse is bound to occur. As more information becomes electronically companies will need to implement appropriate safeguards to protect their information, including XBRL tagged information.

XBRL taxonomies are extensible. Taxonomies are extensible. In other words, they can be expanded to meet a variety of purposes. One such reason for extending a taxonomy is to add a new taxonomy element that better describes an amount for which there is not a currently available taxonomy element. Extending a taxonomy is perfectly appropriate in some cases such as tagging disclosures required by  a newly effective accounting standard that has not yet been incorporated into the UGT. However, some argue that companies can over use taxonomy extensions thereby rendering (pardon the pun) the resulting instance document less comparable with companies in the same industry. Overuse of taxonomy extensions can be a problem. There are examples of companies utilizing UGT extensions exclusively in their filings with the SEC. Extensions are a necessary part of XBRL use, but use of extensions should be made only when appropriate taxonomy elements are not available.

Advantages and Disadvantages of XBRL

The Advantages of XBRL

XBRL is a universally accepted information sharing tool. XBRL is available universally in many countries and facilitates sharing business information in many languages, on virtually any computer platform and in multiple accounting standards. Investors can access business information electronically with XBRL thereby enabling almost real-time analysis. Business information tagged with XBRL can be converted into a variety of formats including HTML, spreadsheets and databases. Because XBRL is so widely accepted, companies can increase automated information sharing with minimal implementation costs.

XBRL is beneficial for a variety of stakeholders. XBRL has broad appeal because it can be utilized by investors to facilitate analysis of financial results, by companies to eliminate manual input and review of information passed through the financial reporting process, and by governmental entities to efficiently gather information from business. XBRL can drive business information sharing efficiencies in a variety of situations. Companies should begin to explore using XBRL in other ways once they complete SEC compliance requirements.

XBRL adapts well to a variety of uses. XBRL is not just a financial reporting tool. XBRL can be used in a variety of business information sharing situations. XBRL could streamline tax return preparation and reporting, sharing of non-financial business information, like production volumes, inventory reserves or merchandise shrinkage. XBRL could facilitate internal corporate efficiencies including the automated movement of information from its source to its end use. XBRL can also enable information sharing between companies and their vendors, customers and business partners. Consider for instance that automated matching of purchase orders, receiving documents and invoices could be automated utilizing XBRL technologies. In addition, there is open source taxonomy, Global Ledger, that companies could utilize to jump-start the use of XBRL within their organization

XBRL provides context, validation, persistence and reusability. A company can use XBRL to improve both the speed and accuracy of information moved through its reporting cycle. In addition, XBRL can improve spreadsheet controls by electronically accessing information from source systems thereby significantly mitigating human input errors. In addition, business information tagged with XBRL persists from period to period and is thereby easily reusable.

XBRL is Open Source. Organizations have paid to develop taxonomies that can be used without any cost to those that use them. There are also web-based readers to read the taxonomies and web-based tools for rendering XBRL Instance files. Even Microsoft Office, a tool widely available in almost every company, is XML enabled (XBRL is a special type of XML). By utilizing the freely available XBRL resources, companies can benefit from XBRL while keeping implementation costs to a minimum.

Why do we render XBRL?

As many filers are finding out during this filing season, XBRL rendering (making XBRL humanly readable) is not as sophisticated as we want it to be. In fact the most commonly used rendering engines have many problems that filers are experiencing as they review their XBRL exhibits. Let’s explore XBRL rendering using the SEC’s rendering engine as an example of the challenges posed by commonly used rendering tools.

When mapping company financial information (Facts) to the US GAAP Taxonomy (UGT), companies are following, or should follow, a process that includes planning, mapping, reviewing, testing, re-reviewing (as needed), approving and then filing. Notice that a part of that process includes viewing XBRL result`s. Inevitably, some form of rendering is the way we currently review amounts being tagged, the XBRL tags selected, the definitions and attributes of those tags and the interrelationships between the amounts reported (like calculation relationships and amounts in SEC filings that agree…or should agree).

We tend to think of financial reporting data in a visual way – in a way we can view it. That’s the old way of thinking about financial reporting. In the future people will be able to grab entire financial reports or individual amounts reported in a disaggregated way (i.e. if they want only EBITDA and Earnings per share, they need only grab the XBRL tags for those amounts for the periods they are interested in). Because XBRL tags the amounts being reported with contextual metadata, the individual amounts have meaning separate and apart from any financial report or software application. In other words, you may still want to think about data in terms of viewable renderings, but investors and other users of financial data are not obligated to do so.

What is XBRL filing? (Part 2)

Remember that as you complete your XBRL filing, that it is very important to get your facts and values right. Your data should be mapped to the appropriate element in the UGT or extension taxonomy. Make sure the definitions and attributes or properties of your selected elements properly represent what you are reporting. It is especially important to get the period type, balance type, data type and other taxonomy attributes (or properties) correct. In addition, the calculation relationships between your data must mathematically work. All of your facts and values should be mapped to the proper taxonomy at the appropriate level.

Your financial statements are required to be detail tagged and your footnotes must be tagged at the following four levels:

·         Level 1: Each complete footnote tagged as a text block

·         Level 2: Each significant accounting policy within the significant accounting policy footnote tagged as a text block

·         Level 3: Each table within each footnote tagged as a text block

·         Level 4: Within each footnote, each amount (i.e., monetary value, percentage and number) is required to be separately tagged

As you complete your XBRL filings, remember to focus on your facts and values and their relationships to the UGT or extension taxonomy. Also give significant consideration to the definitions and attributes of the elements chosen. By doing so you will emphasize the data being reported, not how poorly the formatting of a rendering tool is. Remember too that the purpose of your XBRL filing is to make your data machine readable, not beautiful to look at. We have HTML and PDF versions of your filings for view ability.

What is XBRL filing? (Part 1)

A user-friendly way to understand the concept of what is being reported is to think of the filing as consisting of your facts and values (the Instance file), the company specific taxonomy with all of its various attributes (the Extension Taxonomy) and the relationships between the two (the “Tags”). Technically speaking, your SEC filing consists of six electronic files. Each of these files has a specific role in defining your data. Here are the filenames and their roles.

XBRL Filename (1)	File Type	Purpose of file
xxx-yyyymmdd.xml:	Instance file	Contains the actual facts and values in your filing. Each fact in the instance document is related to an element in your company’s Extension Taxonomy.
xxx-yyyymmdd.xsd:	Schema file	Defines the actual concepts of an XBRL based markup language. It gives their names, their data types, whether you can report about them. I like to think of the Schema file like a traffic cap for the other XBRL files.
xxx-yyyymmdd_cal.xml	Calculation linkbase	Defines how values of concepts should sum up from one to another
xxx-yyyymmdd_def.xml	Definition linkbase	Allows users to define relationships between elements. For example a relationship can be defined that the occurrence of one concept within an XBRL instance mandates the occurrence of other concepts
xxx-yyyymmdd_lab.xml	Label linkbase	Allows the user to attach labels to a given concept
xxx-yyyymmdd_pre.xml	Presentation linkbase	Defines how concepts are ordered and nested

(1) The naming convention for these files is as follows: xxx = company specific identifier (like ticker symbol), yyymmdd = the report date and the remainder of the file name specifies the type and role of that XBRL data file

Transparency, Investors and XBRL (part 2)

Transparency is important to investors and security markets. Transparency is equally important within company operations. Companies seem to be focused exclusively on complying with the SEC’s XBRL requirements, but they should begin to think about ways to increase the transparency of their operations. A quick and relatively inexpensive way of gaining that operational visibility is to utilize XBRL. Use of XBRL within company operations provides many advantages including:

·         Ability to access business and financial information from disparate computer platforms or applications

·         Ease of access to business and financial information including through use of existing desktop tools (like MS Excel)

·         Improved accuracy in the business and financial information obtained because amounts are selected using the related XBRL tag

·         Increased consistency of business and financial information because the information persists from its original source to its ultimate use

·         Speed of access to business and financial information

·         Increased automation and less manual data review, especially in handoffs of data from application to application

·         Increased ability to automate reporting

Transparency, Investors and XBRL (part 1)

The Financial Crisis Inquiry Commission has been meeting to look into the recent financial crisis. The Financial Crisis Inquiry Commission (the “Commission”) website says: “In the wake of the most significant financial crisis since the Great Depression, the President signed into law on May 20, 2009, the Fraud Enforcement and Recovery Act of 2009, creating the Financial Crisis Inquiry Commission. The Commission was established to examine the causes, domestic and global, of the current financial and economic crisis in the United States.”

It is clear that our markets and the risks associated with them are enormously complex. Individual investments of various types can be understood, but when investment banks pool assets, especially sub-prime assets, then package them into investment grade vehicles through strategies like over-collateralization, senior and subordinated holders or insurance vehicles, the investments and underlying risks become more complex. To make matters worse, these pooled assets are then exploded apart, packaged with various derivative products, and sold to investors.

Perhaps the most important way to protect investors is to give them visibility into the risks of the investments they choose. When an investor understands the risks, he can take action to mitigate it. The transparency of investment vehicles and the underlying risk factors is an extremely important component of a robust investor protection approach and a healthy securities market.

IFRS and XBRL go hand to hand

Companies around the world are working to increase transparency in their financial reporting while also reducing the regulatory burden. Two global standards help enable these objectives: International Financial Reporting Standards (IFRS, a set of accounting standards) and eXtensible Business Reporting Language (XBRL, a technology standard). These distinct yet complementary standards often work hand in hand; for example when IFRS-based financial statements are submitted electronically in XBRL.

Organizations all over the world are adopting IFRS, a set of methodologies and disclosure requirements for the preparation and presentation of financial statements. With the goal of implementing a common set of accounting standards worldwide, regulators and standards setters are increasingly requiring companies to use IFRS.

To cope with the systemic demands that IFRS and XBRL impose, companies must prepare their infrastructures for these changes. SAP (Systems Applications and Products in Data Processing) provides the software and solutions to help simplify transitions to IFRS or XBRL reporting.

If adopting IFRS or XBRL is in your company’s future, your mission is clear: Begin treating the transition as an opportunity rather than just a mandate. With careful planning and thoughtful execution, you can use the adoption of IFRS and XBRL as a chance to review and improve your financial consolidation and reporting systems and enable rapid legal compliance.

The National Standardization Administration and Ministry of Finance of P. R. China released the Chinese National Standards on Extensible Business Reporting Language (XBRL) Specifications and General Purpose Taxonomy of Chinese Accounting Standards

On October 19, the National Standardization Administration and Ministry of Finance of China held the Release Ceremony for the Chinese National Standards on Extensible Business Reporting Language (XBRL) Specifications and General Purpose Taxonomy of Chinese Accounting Standards (CAS) in Beijing. The national standards and general purpose taxonomy have defined the elements of XBRL and the basic requirements of preparing XBRL financial reporting based on CAS, thus laying a solid foundation for building a scientific, sophisticated and universal accounting information standards system. The national standards and taxonomy have become a milestone and starting point of China’s accounting information undertaking. Vice Finance Minister Wang Jun and Administrator Ji Zhengkun of National Standardization Administration attended the ceremony and delivered an address.

Wang Jun said that XBRL has effectively enhanced the accuracy and timeliness of information disclosure. It is helpful to conduct profound and meticulous information processing from various perspectives and levels, thus significantly scaling up the width, depth and accuracy of information usage. XBRL can not only be applied in the financial accounting sector, but also be extended to fiscal management, taxation, financial regulation, state-owned assets management, risk management and internal control. He pointed out that the establishment of the national standards and general purpose taxonomy is a trail-blazing cause.

The formulation and implementation of the standards and taxonomy demonstrate inclusiveness, consistence and authority. The design of the standards and taxonomy is in line with the development trend of XBRL, which is forward-looking, flexible and open. In the next step of implementation, it is imperative to continue playing the synergy effect of the Accounting Information Committee, improve the coordination mechanism, and ensure proactive and orderly implementation.

Differences between HTML, XML and XBRL

HTML (Hypertext Markup Language) is a standard way of marking up a document so it can be published on the World Wide Web and viewed in a browser.  It provides a set of pre-defined tags describe on how content appears in a browser.  For example, it describes the font and color of text.  It gives little information on meaning or context. XML (Extensible Markup Language) uses tags to identify the meaning, context and structure of data. 


XML is a standard language which is maintained by the World Wide Web Consortium (W3C).  XML does not replace HTML; it is a complementary format that is platform independent, allowing XML data to be rendered on any device such as a computer, cell phone, PDA or tablet device.  It enables rich, structured data to be delivered in a standard, consistent way.  Whereas HTML offers a fixed, pre-defined number of tags, XML neither defines nor limits tags.  Instead, XML provides a framework for defining tags (i.e. taxonomy) and the relationship between them (i.e. schema).


XBRL is an XML-based schema that focuses specifically on the requirements of business reporting.  XBRL builds upon XML, allowing accountants and regulatory bodies to identify items that are unique to the business reporting environment.  The XBRL schema defines how to create XBRL documents and XBRL taxonomies, providing users with a set of business information tags that allows users to identify business information in a consistent way.  XBRL is also extensible in that users are able to create their own XBRL taxonomies that define and describe tags unique to a given environment.

How can your company create a Financial Statement in XBRL form

There are a number of ways to create financial statements in XBRL:

• XBRL-aware accounting software products are becoming available which will support the export of data in XBRL form. These tools allow users to map charts of accounts and other structures to XBRL tags.
• Statements can be mapped into XBRL using XBRL software tools designed for this purpose.
• Data from accounting databases can be extracted in XBRL format.  It is not strictly necessary for an accounting software vendor to use XBRL; third party products can achieve the transformation of the data to XBRL.
• Applications can transform data in particular formats into XBRL.  For example, web sites are in operation which transform EDGAR filings in the United States into XBRL, providing more efficient access to specific data in the filings.

Potential users of XBRL

XBRL can be applied to a very wide range of business and financial data.  Among other things, it can handle:

·         Company internal and external financial reporting.

·         Business reporting to all types of regulators, including tax and financial authorities, central banks and governments.

·         Filing of loan reports and applications; credit risk assessments.

·         Exchange of information between government departments or between other institutions, such as central banks.

·         Authoritative accounting literature - providing a standard way of describing accounting documents provided by authoritative bodies.

·         A wide range of other financial and statistical data which needs to be stored, exchanged and analyzed.

XBRL International Unveils strategic initiatives to make XBRL easier to develop, use and compare

NEW YORK, NY, OCTOBER 6, 2010 – XBRL International, Inc., (XII), the global standard setting body for the XBRL, today released “Preserve. Promote. Participate. Moving XBRL Forward,” a core vision document that outlines six strategic initiatives to continue the momentum of the XBRL standard.

“Preserve. Promote. Participate.” invites all business reporting stakeholders to get involved in advancing the XBRL standard, outlines the strategic initiatives proposed by the XBRL International Standards Board (XSB), and discusses how these initiatives position XBRL for the future while preserving current investments.

 “XBRL is at a historic milestone – it is already being used by millions of companies, investors, regulators, analysts, accountants, and technologists around the world,” said Anthony Fragnito, CPA, CEO of XBRL International, Inc. “The standard is poised to cultivate even greater market opportunities and value by leveraging the full power of the global XBRL community. The XBRL movement is an open, collaborative community filled with diverse, talented experts who put aside competitive motivations in favor of the collective good that XBRL delivers: greater transparency, improved risk management, and more informed decision-making. Our strategic initiatives create the engine to drive further XBRL adoption.”

Developed after careful deliberations and consideration of worldwide input received from XII’s February 2010 Discussion Document, “Preserve. Preserve. Participate.” outlines these initiatives:

1. Create an abstract model to provide a conceptual framework for understanding XBRL and give

developers a strong foundation for implementing XBRL solutions.

2. Produce quality training materials to support developers and educate those new to XBRL.

3. Define standard Application Programming Interface (API) signatures that enable software

applications to more easily and consistently connect with XBRL-enabled systems.

4. Reorganize the existing XBRL technical specification to make it more readable and easier to

understand.

5. Enhance data comparability to enable richer analysis across a wider set of data, regardless of

project boundaries.

6. Create application profiles to simplify the application development process by decomposing the

XBRL technology stack into smaller components.

“The XBRL Standards Board has outlined a set of strategic initiatives with the goal of making it easier for

developers to produce, compare and use XBRL data within software applications,” said Chethan Gorur,

Chair of the XSB. “We invite the XBRL community to take an active role in the development of these

initiatives.”

How XBRL Works

XBRL is a member of the family of languages based on XML, or Extensible Markup Language, which is a standard for the electronic exchange of data between businesses and on the internet.  Under XML, identifying tags are applied to items of data so that they can be processed efficiently by computer software.

XBRL is a powerful and flexible version of XML which has been defined specifically to meet the requirements of business and financial information.  It enables unique identifying tags to be applied to items of financial data, such as ‘net profit’.  However, these are more than simple identifiers.  They provide a range of information about the item, such as whether it is a monetary item, percentage or fraction.  XBRL allows labels in any language to be applied to items, as well as accounting references or other subsidiary information. 

XBRL can show how items are related to one another.  It can thus represent how they are calculated.  It can also identify whether they fall into particular groupings for organisational or presentational purposes.  Most importantly, XBRL is easily extensible, so companies and other organisations can adapt it to meet a variety of special requirements.

The rich and powerful structure of XBRL allows very efficient handling of business data by computer software.  It supports all the standard tasks involved in compiling, storing and using business data.  Such information can be converted into XBRL by suitable mapping processes or generated in XBRL by software.  It can then be searched, selected, exchanged or analysed by computer, or published for ordinary viewing.