What is XBRL?
XBRL is a computer language which has been developed for the exchange of financial reports through the Internet.
Over the years, numerous information exchange mechanisms have been developed, for individual and specific needs, multiplying the formats, successive error generating encoding and the provision of redundant information.
Anxious to benefit from the latest information, economic players are increasing its frequency and demand greater transparency within the framework of corporate governance. All of these separate demands make the process slow, rigid and expensive.
In brief, this is what the information exchange resembles:
Consequently, a solution was required which would satisfy companies wishing to streamline both their internal and external financial reporting, and authorities wishing to maintain the quality of information they receive while trying to reduce the overall administrative burden. XBRL provides an attractive solution.
XBRL is an open standard based on XML (Extensible Markup Language) for the collection and electronic exchange of financial data via the Internet. It was originally developed by the American Institute of Certified Public Accountants in order to satisfy the specific requirements of both internal and external financial reporting.
The principle of XBRL language consists of identifying individually each item of information (for example: ”own funds”) in a dictionary called a taxonomy. The information, listed in a structured manner, may then be recognised, processed and presented in different ways, according to the desired use (example: annual accounts or income tax return).
The flexibility of XBRL also enables several precise reference systems in separate taxonomies to be used (Belgian accounting reference system, IAS/IFRS standards).
There are a number of advantages to using XBRL:
- the absence of extra processing operations, such as re-encoding, means that the quality of the collected data is improved,
- the electronic exchange of data but also their processing and analysis are made easier, substantial savings can be made because the data may be selected, re-used and re-formatted depending on the reporting required.
This optimisation and the cost savings may only be achieved in full if all of the players take part in the integration process aimed at harmonisation and the standard exchange of data.
Companies (as data preparers), regulators (who collect the data) and analysts (as users of the data) must participate in the process.
The organisation currently has more than 650 members worldwide; these include companies at all levels of the financial "supply chain", regulators (Federal Deposit Insurance Corporation - FDIC, Securities and Exchange Commission - SEC, Banco de España, Deutsche Bundesbank, etc.), software companies (Microsoft, IBM, SAP, etc.), analysts (Reuters, etc.) and firms of accountants (PWC, KPMG, E&Y, Deloitte).
For further information, please consult the XBRL International website (http://www.xbrl.org/).