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XBRL: Financial Content Management Language
Over the last week Jon Udell of InfoWorld has had a podcast and a number of blog entries about XBRL (eXtensible Business Reporting Language).
Since 2000, many have expected to see a revolution in the accounting and financial industry because of XBRL. It just didn’t happen though because industry acceptance was lacking. But that seems to be changing. In October 2005, the US Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board launched an XBRL project that mandates banks to submit quarterly reports in XBRL format. 8300 banks are now participating. The SEC is also moving towards standardizing XBRL as the language for exchange and reporting of financial information. EDGAR Online is providing company financial statements in XBRL format. And XBRL is gaining ground in Europe too.
XBRL as a standard exchange format will revolutionize the way financial data can be communicated, often shaving days or even months off of existing processes. Company financial records can be consolidated. Manual re-entry or data transformations will be eliminated. XBRL will further commoditize/standarize datasets operated on by accounting software and ERP packages.
Further, XBRL will form the foundation for software tools and applications that will help corporations provide the greater transparency that compliance regulations like Sarbanes-Oxley have been demanding. Financial comparative analyses of companies can be run at the push of a button. This will be a huge plus for securities analysts and investors.
Technologies like XBRL and ECM (Enterprise Content Management) document and records management are key towards giving companies and their auditors greater control in finding corporate information.
