XBRL. Moving to the next reporting standard

What is XBRL?

The language of corporate reporting has gone digital. XBRL is a language for the electronic communication of business and financial data which may dramatically improve how public companies report their business and financial data to the world.

XBRL stands for eXtensible Business Reporting Language. It is one of a family of "XML" languages which is becoming a standard means of communicating information between businesses and on the internet.

XBRL is a royalty-free, universal information-format standard that enables all software to share and process business information using Internet technology, such as the Web services standards. Since they are software- and platform-neutral, XBRL and Web services can be deployed over existing company systems to automate information exchange-creating a straight-through reporting environment. This eliminates manual information gathering and consolidation tasks, pulls time and costs out of internal reporting processes, enables reporting or analytical software to instantly re-use information.

As a universal information-format standard for business data, XBRL Web services provides a platform for establishing common definitions and contexts for each piece of business data across supply chains, industries and even nations. Through these common standards, software the world over will be able to understand and process information contained within business reports consistently and accurately.

Why XBRL matters?

The main benefits companies can realize from utilizing XBRL are in the preparation, analysis and communication of business information. Moreover, XBRL offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

XBRL's importance will grow in the near future for both users and suppliers of financial information because of tighter reporting requirements for 10K/Q preparation time for public companies, the increased frequency of 10 K/Q evaluations by regulators such as the SEC and CorpFin and the impact of Section 409 Sarbanes-Oxley Act on regulators to achieve these evaluations in a timely manner.

Who is involved with XBRL?

XBRL is growing quickly around the world with increasing participation from individual countries and international organizations. XBRL International ;is comprised of jurisdictions which represent countries, regions or international bodies and which focus on the progress of XBRL in their area.

In the jurisdictions of United States and Canada, both countries have adopted XBRL to varying degrees. In the United States, the AICPA, the Big Four accounting firms, a select number of public companies, the major printing companies and the SEC are adopting this standard. Similarly, the three accounting bodies, CICA, CMA Canada and CGA and the major accounting firms have also endorsed the use of this technology.

Regulator Involvement and Professional Standards Involvement

Currently, the SEC has adopted a voluntary pilot program encouraging public companies to file their SEC documents using XBRL. More information can be found below.

Harvested from Press Release from the SEC:

http://www.sec.gov/news/press/2005-112.htm

Press Release from the PCAOB

http://www.pcaobus.org/News_and_Events/News/2005/05-25a.asp

PCAOB Staff Q&A document:

http://www.pcaobus.org/...Reporting_2005-05-25%20.pdf

AICPA

Article XBRL: A Multitalented Tool

http://www.aicpa.org/pubs/jofa/apr2005/cunning.htm

SCG can help companies improve and grow through use of XBRL

Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyze data much more rapidly and efficiently if it is in XBRL format.

SCG can assist in implementing this tool for your organization and assist in re-engineering the financial reporting process to take advantage of the many capabilities of XBRL to achieve faster and more accurate reporting.

The SEC Reporting Group and XBRL

The SEC Reporting Group and the AICPA have joined forces to help promote awareness, understanding and training for this future potential reporting standard. For the month of October 2005, both the Dallas and Houston chapters have featured meetings specifically regarding XBRL.

Resources and Downloads

XBRL websites:

http://www.xbrl.org/

http://www.xbrl.org/us/

Article: XBRL GL: The General Ledger Gets Its Groove

Journal: Strategic Finance from the IMA

http://www.imanet.org/ima/docs/3300/3293.pdf

Article: Is XBRL an Answer?

Journal: The Journal of Accountancy

http://www.aicpa.org/pubs/cpaltr/may2002/supps/busind6.htm