In case you?re not familiar with XBRL ? it stands for eXtensible Business Reporting Language. The idea behind XBRL is simple. Instead of treating financial information as a block of text – as in a standard Internet page or a printed document – it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag.
The introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data “intelligently”: they can recognise the information in a XBRL document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information. (For more information on XBRL visit www.xbrl.org) .
An important aspect to understand about XBRL is that it simply makes the existing financial data more accessible and comparable. XBRL does not analyze data or provide any type of guidance ? it simply turns unstructured paper-based financials to data that can be used by computers. From an analyst or IRO point of view, the benefit is that having the data in this format will allow for a more efficient analysis of financial results on both a per company and comparative or industry basis.
Two great example of XBRL are available on the SEC web site. The first, is Interactive Financial Reports, allows you to quickly view and navigate all XBRL filings that have been submitted during the SEC?s voluntary program. The second, is the Executive Compensation tool, which allows you to easily search for issuers either by ticker, by Market Cap, Revenue or industry and then compare detailed executive compensation. Each of these early tools are great examples of the efficiency that XBRL will bring to the broad market as ful adoption is acheived.
Recently the SEC released the draft findings of the Advisory Committee on Financial Reporting. Within the report, the committee said ?XBRL has the potential to provide financial and non-financial information to the market in a way that is better, faster and cheaper than the current system, enhancing the availability, accessibility, consistency, and comparability of business information, together with cost-savings that will be of great benefit to companies, analysts, and investors alike,?.
Although XBRL is currently primarily focused on financial data, the inclusion of non-financial data is also important when you consider the degree of information disclosed through non-financial items such as press releases, regulatory filings, corporate web site content and other information forming an issuer’s universe of disclosure. As XBRL continues to gain adoption in the market, be sure to keep an eye on how this evolves to transform all aspects of your corporate disclosure into this interactive data format.[tags] Q4 Web Systems, Q4, Investor Relations, IR Web Sites, Corporate Disclosure, XBRL, Corporate Reporting, Financial Reporting [/tags]