XBRL (eXtensible Business Reporting Language)
XBRL (eXtensible Business Reporting Language) is the emerging standard for the tagging of business reports, to allow computer creation and consumption of business information. XBRL will do to printed business reports, what the internet has done to the phone book. Until now, business reports have been document centric. Documents created in the XBRL standard become content centric. Each piece of information in the document becomes a distinct and separate piece of consumable information.
XBRL is coming to a regulator near you.
In the United States, the SEC has mandated XBRL for corporate filers, with the first filings in XBRL being provided for the top 500 (aprox) companies for their first filings post June 15, 2009.
Like any new standard there will be difficulties with implementation, assurance, ease of use, availability of software and tools, and most important a lack of real expertise. Companies that wait for a mandate will find themselves in a SOX type situation - too many companies chasing too few resources. "Experts" will magically appear, and costs could spike, so plan early.
In early 2008 we wrote the following, and it remains accurate today:
"What can the thousands of SEC reporting businesses do today to prepare themselves? There are four steps that a business can take today to ensure that the transition to XBRL is smooth and to position their business for taking advantage of this change:
- Identify a project team to learn more about interactive data and experiment with the creation of XBRL versions of current reports.
- Ask the primary business reporting software provider to brief appropriate personnel on how they will assist in making a smooth transition.
- Ask the company’s auditor to brief appropriate personnel on how they will be incorporating the provision of assurance over XBRL reports into the audit process.
- Brief company executives and Board of Directors on the impact, benefits, and timelines for the introduction of XBRL into business reporting processes.
When ultimately mandated by the SEC, the transition from document-centric to information-centric business reporting need not be resource-intensive, and it should not become another “SOX” event. All the evidence from participants in the voluntary and test programs to date seem to indicate that the costs are significantly lower than many fear. The steps above will ensure that the transition goes as smoothly as possible. Otherwise, as with any fundamental change, failure to plan and prepare will result in increased costs — both internal and external."