So What Is XBRL?
XBRL stands for eXtensible Business Reporting Language and has been designed specifically for financial reporting. Essentially it is an XML schema and associated taxonomy for communicating and exchanging financial information. XBRL can be used by companies to report their financial results to governments, tax authorities, stock exchanges and anyone else that is interested in a single, consistent manner, thereby saving both sides time and money.
An example of some XBRL is shown below:
<?xml:namespace prefix = xbrli /><xbrli:context id="BJ2004">
<xbrli:entity>
<xbrli:identifier scheme="www.iqinfo.com/xbrl">ACME</xbrli:identifier> </xbrli:entity>
<xbrli:period>
<xbrli:instan>2004-01-01</xbrli:instant>
</xbrli:period>
</xbrli:context^gt;
As you can see from the example XBRL in of itself is not technically unique or challenging - in essence technically it is just an XML schema. The real power lies in the fact that it is an open standard and that it brings together the technical financial reporting/accounting world and XML to create something simple, effective and extensible that can save both companies and regulatory authorities time and money.
Why Should You Care?
As I alluded to earlier XBRL is gaining momentum worldwide. In the U.S. the SEC has made it mandatory for filers above 5 billion dollars to report in XBRL and this is sure to be extended in the near future. In the U.K. companies currently have the ability to report using XBRL and it will be mandatory from 2011. Similar moves are afoot or have already been taken in Australia and the Netherlands amongst others. Here in Ireland the Revenue Commissioners recently announced that they will provide the ability for large cases to report in XBRL from September of 2010. Mandatory filing cannot be far away.
Apart from the emerging requirement to report in XBRL, there are other benefits to companies using XBRL such as the ability to provide data once and in a standard format to multiple government agencies as part of an attempt by governments in Ireland and abroad to reduce the administrative burden on companies. For example by filing annual returns once in XBRL with the tax authorities there is no reason why this could not be passed on automatically to companies registration offices and other statistical bodies without any additional burden on the submitter. For the submitter there are also advantages in streamlining the preparation of financial accounts, particularly in organisations with multiple subsidiaries whose accounts need to be consolidated before submission.
More Information
More information on XBRL in Ireland can be found http://www.xbrl-ie.org/ or through BRIL members such as Deloitte (for whom I work) - http://www.deloitte.ie/.
