XBRL Gets Real as the Standard for Financial Reporting - InformationWeek
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XBRL Gets Real as the Standard for Financial Reporting

XBRL is fast moving from the vision phase to a practiced global standard.

XBRL (Extensible Business Reporting Language) is fast moving from the vision phase to a practiced global standard, and it's no longer a question of if but when it will be mandated by agencies including the SEC (Securities and Exchange Commission). This much was clear at the 11th XBRL International Conference, held last week in Boston, at which SEC Chairman William H. Donaldson urged all companies reporting to the agency to adopt the XML-based format.

"Tagged data will improve the quality of information and the speed of its availability to investors and the marketplace," Donaldson told conference attendees. In February, the SEC announced a voluntary program that encourages companies to submit XBRL-formatted financial reports.

Developed to ease electronic communication and analysis, XBRL tags each data cell and each line of content in a financial statement to provide computer-understandable context and, therefore, fast query and analysis. XBRL is already mandated by the FDIC, and it is supported and in various stages of adoption among regulatory agencies in the European Union, United Kingdom, The Netherlands, Spain, Japan and Korea.

XBRL will enable more than good governance, as standards-based analysis will let corporate strategists quickly review internal results and perform apples-to-apples comparisons with competitors. XBRL-enabled products and services demonstrated at the XBRL event included I-Metrix, a suite from business information supplier Edgar Online that lets users analyze some 1,000 normalized data points from more than 12,000 companies that file with the SEC. The tool lets users derive and compare key metrics and ratios such as cash flow, gross margin and profit margin.

Rivet Software marked the event with an upgrade of its Dragon Tag add-in for Microsoft Word and Excel, which converts content and data into XBRL. Microsoft itself used the tool to supply its latest financials to the SEC in XBRL format. And UBmatrix demonstrated a Universal Business Server for Corporate Reporting, which the company says will ease access to data in disparate sources and applications so it can be integrated and analyzed with business intelligence and analytical tools.

Also represented at the event were SAP, Software AG, Fujitsu and Business Objects as well as professional organizations including IMA (Institute of Management Accountants), which last week endorsed XBRL and encouraged its widespread adoption. According to IMA President and CEO Paul Sharman, XBRL will "reduce costs, increase efficiency and significantly improve the quality of information available to support decision support, planning and control functions."

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