Understanding eXtensible Business Reporting Language (XBRL)
eXtensible Business Reporting Language, commonly known as XBRL, is a globally recognized software standard designed to revolutionize the way financial information is conveyed, facilitating seamless compilation and sharing of data. It is essentially an application of XML (extensible markup language), a specification utilized for structuring and defining data on the web.
XBRL utilizes tags to label individual pieces of financial data, enabling easy programmable utilization by compatible software programs. This standardized approach streamlines data transmission between enterprises.
Key Takeaways:
- eXtensible Business Reporting Language (XBRL) serves as a universal framework for exchanging business information based on accounting standards.
- XBRL, rooted in XML coding, provides a uniform method for transmitting financial records across the globe.
- The latest stable version of XBRL, v2.1, released in 2003, has additional optional modules for enhanced functionality.
Exploring the Functionality of XBRL
Picture you’re analyzing a company’s financial statements online, typically presented in plain text format. Previously, inserting this data into a spreadsheet for analysis would require manual entry or copying and pasting each entry.
However, with XBRL-formatted data available on the website, conversion into a compatible spreadsheet program becomes instantaneous, streamlining the process significantly.
Thanks to the standardized tags and language structure, financial information adhering to one country’s accounting standards can seamlessly align with another’s, even if substantially varied. While not mandatory for all businesses, the prevalence of XBRL suggests a future where all entities may adopt this format for financial reporting. An advancement called iXBRL integrates XBRL metadata into HTML, enhancing accessibility.
First introduced in 1998 with v1.0 by the American Institute of Certified Public Accountants (AICPA), XBRL has evolved to v2.1, established in 2003. While the core standards have remained stable, several add-on modules have been developed to expand functionality and versatility.