XBRL: Extensible Business Reporting Language

Focus: Financial statements

DTD or Schema: DTD and Schema available here with registration.

Website: www.xbrl.org

Contact: jnaumann@aicpa.org

Founding & Key Members:

  • Arthur Andersen
  • Bridge Information Systems
  • Deloitte & Touche
  • Dow Jones & Co.
  • Dresdner Kleinwort Benson
  • Edgar Online
  • Ernst & Young
  • Fidelity Investments
  • First Call
  • Innovision
  • JP Morgan
  • KPMG
  • Microsoft
  • Morgan Stanley
  • Multex
  • Oracle
  • PeopleSoft
  • PricewaterhouseCoopers
  • Reuters
  • Standard & Poor’s

Organization: XBRL is comprised of an XBRL Steering Committee, which meets face-to-face on a monthly basis, and the working groups: Domain, Specification, Liaison/Interoperability, Communications and Strategy.

The Steering Committee is comprised of member companies. The Domain working group determines what existing GAAP the XBRL specification must accommodate. The Specification working group translates the functional specification created by the Domain group into a technical specification.

The Liaison/Interoperability group focuses on how XBRL fits with other Internet standards across multiple industries and through the business reporting supply chain. It also develops an adoption strategy, including possible deliverables and applications for XBRL. The Communications group is involved in branding and marketing of the standard to ensure it is recognized as the standard in the market. The final group, Strategy, focuses on the overall strategy of XBRL including project scope, phases, implementation and adoption considerations.

Background: XBRL.org was formed to create a standard for the global business information supply chain to create, exchange and analyze financial reporting information. The range of information that the organization covers includes regulatory filings, general ledger information and audit schedules.

The group was originally founded as XFRML, tracing its roots back to April 1998 when Charles Hoffman, a CPA with the firm Knight Vale and Gregory in Washington began developing prototypes of financial statements and audit schedules using XML.

After a series of presentations, the American Institute of Certified Public Accountants (AICPA) decided to fund the project to create a prototype set of financial statements in XML, which was completed by the end of the year. By mid-1999, 12 companies had joined in the effort as members of an XFRML Steering Committee and AICPA officially announced its plans for creating and XML financial reporting specification.

The group’s first release was in July 2000, which enabled the creation of financial reports in XML. It is aimed at benefiting all users of the financial information supply chain; public and private companies, the accounting profession, regulators, analysts, the investment community, capital markets and lenders, as well as key third parties such as software developers and data aggregators.

Benefits include a reduction in the need to enter financial information more than one time, which therefore reduces the risk of data entry error and the need to manually key in information for various formats (such as a printed financial statement, an HTML document for a company’s Web site, an EDGAR filing document, a raw XML file or other specialized reporting formats such as credit reports and loan documents). Such savings lower a company's cost to prepare and distribute its financial statements while improving investor or analyst access to information.

As an example of its application, a comparison of revenue figures for the 10 largest companies globally would require searching for and obtaining relevant documents, and then pulling the relevant information into a spreadsheet before the analysis can take place. Utilizing XML could enable the documents to be searched simultaneously as they could all be accessed with a unified protocol and imported directly into a spreadsheet, saving much time.

A couple of issues related to XBRL, however, include a lack of universal international accounting standards, which could hinder true comparisons depending on the area of analysis. Also, the adoption rate of XBRL for financial statements relies on the speed with which the accounting software development firms take up the standard.