InformationWeek

Extensible Business Reporting Language--or XBRL--is an XML-based specification that uses financial-reporting standards to exchange financial information. By using XML, XBRL lets individual countries' financial systems--each of which has a different way of defining currency worth, different standards of measurement, and other factors--interoperate smoothly.

"Accounting rules are different in the U.K., Australia, the United States, and other countries," says Mike Willis, chairman of the XBRL steering committee and a partner at PricewaterhouseCoopers. "By providing an XML format, we'll have a much more effective means of conveying data to users."

Companies that adopt the XBRL framework will also be able to more easily assimilate financial data when they merge or acquire other companies, says David vun Kannon, a manager at KPMG Consulting. "The internal user of financial data is facing a very similar problem of comparing and understanding how to analyze information like the external user is," vun Kannon says. "We've brought in domain experts, the CPAs and accountants who know these financial field requirements cold, and they are the ones that designed this whole structure of XML schemas."