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Back in 2002, RR Donnelley collaborated with Microsoft
and Morgan Stanley to file the first ever EDGAR documents
with extractable XBRL.
We've stayed close to XBRL and XBRL applications ever
since.
Here, we plan to explain what XBRL is and how it is
impacting the corporate and financial community.
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What does XBRL stand for?
XBRL stands for eXtensible Business
Reporting Language
(XBRL). Unlike HTML – the language of the Internet
– XBRL is specifically dedicated to financial
reporting.
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What is XBRL?
XBRL is a standards-based method with which users can
prepare, publish (in a variety of formats), exchange
and analyze financial statements and the information
they contain.
XBRL complements XML, which is the universal format
for data on the Web that uses tags (identifiers) to
describe and deliver data from an application. XBRL
allows accountants and other financial professionals
and regulatory organizations to identify – by
a tag – items unique to business information,
such as financial statements. Once an item or piece
of financial information is tagged, it can be used consistently
throughout various and diverse reports that contain
that particular item or piece of financial information.
That's because the item can easily be read by other
applications.
For example, by identifying (tagging) financial data
with XBRL one time in, say, an Excel spreadsheet, users
can digitally publish and/or reliably import this information
to a balance sheet, income statement, statement of stockholders'
equity, statement of cash flow, and so forth), or for
use on other compliance, marketing, or communications
purposes.
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How does XBRL affect the
financial community?
In several significant ways:
- It gives the financial community a standards-based
method to prepare, publish in a variety of formats,
exchange and analyze financial statements of both
public and private concerns and the information they
contain – across all software formats and technologies,
including the Internet.
- It improves and speeds up access to financial information
without requiring a change to existing accounting
standards or the disclosure of any additional information.
- It leverages the efficiencies of the Internet as
today's primary source of financial information (with
more than 80 per cent of major US public companies
providing some kind of financial disclosure on their
websites) and makes searches more accurate and relevant.
- It provides accurate and reliable information to
assist investors and those in the financial services
industry in making informed decisions, by allowing
financial information to be available freely, quickly,
consistently and transparently on the Internet.
- It enhances distribution of information without
losing data integrity, since XBRL allows the same
financial information to be "reused" for
different purposes.
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What are the key benefits
of XBRL?
Reliability. Since financial data
is tagged just once, the quality and integrity of the
data is increased. There is little margin for error
across financial statements and other uses because,
once tagged, information that is transferred to another
financial statement does not change. There is no need
to enter financial information more than once, reducing
the risk of data entry error.
Flexibility. XBRL provides a framework
that may be used by all companies, but which is flexible
enough to be customized for industry needs as well as
an organization's internal needs. Information can be
used and received in a format preferred by the user.
Efficiency. Because the information
is tagged once and only once, documents can be prepared
more time-and-cost efficiently, financial information
retrieved and shared more quickly and easily, and published
online or sent to a financial printer, or uploaded faster.
Cost Reduction. The efficiency of
XBRL reduces the cost of analyzing and reporting business
information, which reduces the cost, and increases the
speed, of preparing and distributing statements and
other information – in addition to the cost of
errors in financial data.
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What does the SEC say about
XBRL?
The SEC's Chairman Christopher Cox recently stated,
“Markets function best when all the information
that market participants need is available to them when
they want it, and in a form they can use it. That’s
why the Commission is so keen on interactive data for
financial reporting. I’m not thinking years. I’m
thinking months.”
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Are any other organizations
or agencies looking into XBRL?
Quite a few. They include:
- The Joint Financial Management Improvement
Program (JFMIP), whose members include the
Treasury Department, GAO, OMB and Office of Personnel
Management. In a report issued late in 2001, the JFMIP
– joined by the FDIC – identified XBRL
as a solution for US federal agencies in the exchange
of financial date.
- The International Accounting Standards Board
(IASB), which is currently developing XBRL-based specifications
for public comment and approval.
- The Banking Information Technology Secretariat
(BITS), an organization of large US banks and other
financial services companies, is working with the
XBRL.org industry group to determine the efficacy
of using XBRL. So is the Association for Cooperative
Operations Research and Development (ACORD),
an organization that sets e-commerce standards for
the insurance industry that allows different companies
to transact business electronically with agents and
other partners in the financial services market.
- Deutsche Bank has begun using XBRL
to process loan information and streamline its credit
analysis process, and Bank of America
has started a similar pilot program.
- The Australian Prudential Regulatory Authority
became the first banking regulator in the world to
use XBRL to collect financial statements from more
than 12,000 super funds, insurers and banks in Australia.
- The Singapore Stock Exchange is
close to going the XBRL route.
- US government agencies – including the Federal
Deposit Insurance Corporation, US Census Bureau, US
Dept. of Defense, Defense Finance and Accounting Service
– are also supporting XBRL as a solution.
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What is RR Donnelley doing
about XBRL, and how does one convert to or adapt this
e-language for financial statements?
All indications are that XBRL could well be the wave
of the future of e-communicating financial information
– whether to government agencies or the public,
onto websites, or digitally to printers for hard-copy
printing and distribution.
As a state-of-the-art communications solutions organization,
RR Donnelley takes pride in staying on top of latest
technology that can produce our clients' financial documents
more efficiently, effectively and economically. That's
why we are members of the XBRL consortium, formed to
promote and further refine XBRL. Our recently announced
partnership with EDGAR
Online to provide a full service solution for XBRL
creation and filing further illustrates our leaderships
in this initiative.
Specially designed software will allow XBRL to be adapted
to financial data. Many RR Donnelley communications
solutions – including our composition system –
are already XML-based. Because XBRL is a subset of XML,
adapting XBRL is a matter of RR Donnelley professionals
collaborating with our clients to XBRL-tag their data.
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Is XBRL a new accounting
standard?
No. XBRL neither replaces nor changes any domestic
(i.e., U. S. GAAP) or international accounting standards,
nor requires additional disclosure from companies to
their audiences. It is simply a method of attaching
a tag to financial data that can be used for multiple
financial statement reporting and compliance, or to
help achieve marketing or communications objectives.
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Who developed XBRL?
In 1998, the High Tech Task Force of the American Institute
of Certified Public Accountants (AICPA) took the initiative,
by creating a product description that called for the
creation of a prototype set of financial statements
using XML e-language, of which XBRL is a subset. (For
a detailed history of the development of XBRL, visit
http://www.xbrl.org/aboutus/index.asp?sid=15)
Since then, the XBRL consortium was formed to continue
to develop and promote XBRL. Members, including RR Donnelley,
are major domestic and international accounting firms,
accounting organizations, software companies, and communications
firms.
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For More Information
For more comprehensive information on XBRL, visit the RR Donnelley Global Capital Markets website.
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