eXtensible Business Reporting Language (XBRL) is moving forward – an update

News categories: the new role of finance and New Economy financial management, digitizing the New Economy enterprise

Some months ago I reported that “eXtensible Business Reporting Language (XBRL) will revolutionalize corporate reporting and investor relations – a new Internet (xml) standard for exchange of business data is emerging”. In the meantime things have developed much faster than I have expected and XBRL has been called the most revolutionary development in accounting since the spreadsheet and the ASCII file. In addition I received recently several requests for more information about XBRL. So I will take the opportunity to give an update on it.

As you may remember, XBRL is an XML-based framework for the extraction, manipulation, exchange and analysis of financial information. It’s an XML-based specification that uses accepted financial reporting standards and practices for exchanging financial reports across all software and technologies, including the Internet. Formerly, financial data from different corporations often was hard to compare. Each company used it’s own standard of structuring and aggregating financial accounts into financial statement items and reports. XBRL is providing now common XML based definitions of financial statement items thus enabling business organizations to exchange financial and performance information more easily with stakeholders such as investors, financial analysts, business partners, data aggregators, accounting professionals and public authorities.

In April 2000, under the initiative of the founder of XBRL.org, AICPA (= American Institute of Certified Public Accountants), more than 30 organizations (auditors, software companies …), all members of the XBRL Committee, announced XBRL to the public. On July 31, 2000, the XBRL specification and first taxonomy (Financial Statements for Consumer & Industrial Product companies, US GAAP) was released. Since then, XBRL.org was doing “field tests” with a select group of Fortune 1000 companies to evaluate the feasibility of XBRL. Additionally, several of the largest organizations of their kind already begun implementation of XBRL. Also US Securities and Exchange Commission Chairman Arthur Levitt has recommended last November that the extensible Business Reporting Language (XBRL) project continue to expand in its effort to turn financial statements into meaningful information for investors using this new revolutionary technology. Now the XBRL Committee has more than 70 members (see detailed report on this development)

Beside support for US GAAP reporting, the IASC approved in June 2000 the forming of a task force to develop XBRL for IAS Financial Statements. This committee has released a draft taxonomy of XBRL in January 2001 to members of XBRL.org for review. The release of the IAS taxonomy is of tremendous importance, as many countries are waiting for this to launch XBRL committees in their own countries. In some countries it has already started. In Germany a kickoff-meeting of a national committee was held on November 7th, 2000. The basis for working on the German taxonomy will be a chart of accounts provided by the Deutsche Bundesbank, which is supporting this initiative. Also in the UK the Institute of Chartered Accountants in England & Wales (ICAEW), also a member of the XBRL.org Committee, has formed a broad based steering group in London that is in the process of developing the UK taxonomy for financial statements.

In January 2001 Bryant College and XBRL.org have forged a partnership in which the college will serve as the project’s educational resource center. The college will be responsible for designing courses and course materials for the academic community. The college expects, that by the time today’s juniors graduate in May of 2002, the demand for accountants that know XBRL will be very high. The XBRL resource center maintained by Bryant College is probably one of the best resource sites on XBRL (link to the XBRL resource center).

Summary of information about XBRL:

· Description of the XBRL taxonomy for Financial Reporting for Commercial and Industrial Companies, US GAAP, dated 2000-07-31

· To get a better understanding how XBRL really works, I recommend to download the XBRL viewer and run it with the US GAAP XBRL taxonomy which is included in the zip file (requires IE5)

· Example for a set of XBRL based financial reports

· XBRL.org's XBRL resource center

· accountingsweb.com’s XBRL resource center

· To subscribe for businessfinancemag.com’s XBRL newsletter

· XBRL discussion forum on yahoo.com

· Homepage of the XBRL Consortium

Some infos about software supporting XBRL based reporting:

As an example may serve SAP's Strategic Enterprise Management product -
part of SAP's mySAP Financials solution, which comprises a module for
financial consolidation and reporting called SEM-BCS Business Consolidation.

Functions will include (first functions planned for Version 3.1A):

· flexible mapping between XBRL tags and SEM info objects such as
accounts, financial statement items, transactions types

· exporting the financial statement data as an XBRL file. In this
area, there will probably be a close connection to SAP's investor portal -
part of SAP's mySAP Financial offering

· import of XBRL statements for financial consolidation, planning and reporting

About these and other interesting topics on “New Finance” you will find information, articles and presentations, expert links and book recommendation in Juergen Daum’s New Economy Management Best Practice Channel on Finance

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