What is XBRL?

Increased economic, market and regulatory pressures require senior management to re-assess how one of their most important, and in many ways most mundane, business processes is performed — reporting of business information.

Companies are required to accumulate and publish information to internal and external stakeholders about their business in increasing frequency, detail and a variety of electronic formats. Although the business reports are now mostly distributed electronically, only humans can fully understand the information, it is not machine-readable for computers.

Today, most reporting documents being viewed on the computer screen are no more interactive or usable than a photocopy. An emerging standard, XBRL (Extensible Business Reporting Language), promises an exciting alternative that will improve the reporting process for report preparers and users.

As a result of attaching identifying tags to individual pieces of data, a business-reporting document becomes "smart" (i.e., a computer can read the data in context, search for information, or perform calculations). XBRL heralds the transition from a document-centric environment to one that is data-centric. Importantly, this transformation is about being able to electronically enable data and its attributes (i.e., what financial statement classification it belongs to, how it should be presented, who created it, and its audited status).

As companies review their business reporting disclosure controls and procedures and comply with new filing requirements, XBRL is becoming a tool to facilitate and restore business reporting and communicate the value of the company.

The adoption of XBRL promises to help companies make faster and better decisions which will lead to more efficient capital markets that in turn may reduce capital costs. Forward thinking organizations looking to gain competitive advantage are already participating in projects such as the US Securities and Exchange Commission's Voluntary Filing Program, or are leveraging their efforts in pilot projects inside their organizations, whereby more timely and increased disclosures may increase the value of their company.

We hope this site will add to the public dialogue now taking place about the merits of XBRL and about the promise of XBRL specifically. To that end, we have outlined the ways we think you can benefit from adopting XML now for your key business-reporting processes and provided a road map that can move you toward these ends. Although various technical, regulatory and change management hurdles must be cleared before this new electronic reporting standard can take hold, much of this work is now under way.

On 14 May 2008, the US Securities and Exchange Commission (SEC) voted to propose the mandatory use of eXtensible Business Reporting Language (XBRL) in reporting financial information to the SEC.