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 has become a standard means of communicating information between businesses and on the internet.
XBRL was developed by an international non-profit consortium of approximately 450 major companies, organisations and government agencies. It is an open standard, free of license fees. It is being put to practical use in numerous countries and implementations of XBRL are growing rapidly around the world.
This site provides information about the nature, uses and benefits of XBRL. It explains how individuals and companies can join the effort to move forward and make use of the language.
A Simple Explanation
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 income has its own unique tag.
The XBRL process begins with selection of a taxonomy, which are lists of tags that can be applied to various financial items disclosed by companies. Different taxonomies have been developed to represent different sets of accounting standards. For example, taxonomies exist for IFRS, US GAAP and Canadian GAAP, among many others. The tags are represented in the taxonomies as elements, such as “cash and cash equivalents” and “inventories.” In order to prepare XBRL instance documents, the data items reported by a company are mapped to the matching elements of the appropriate taxonomy. Software is then used to process these mappings to create the instance documents. The software used can be stand-alone software or the XBRL functionality in generalized accounting and business software.
When created, the instance documents contain all of the information included in the taxonomy elements, such as the nature of the item, the language in which it is presented, the manner in which it is disclosed, and the accounting standard used to prepare it. 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 also be used to represent information other than that included in the financial statements and notes. For example, taxonomies have been developed to represent data points from individual transactions, through journal entries to GL accounts. This is done by using the XBRL GL taxonomies. Also, examples of other taxonomies include the MD&A, sustainability reports, executive compensation and corporate actions to name a few.