XBRL provides a standardised way for producing, exchanging, analysing and publishing financial information. Since XBRL is based on the international open standard XML, its usage is independent from any software vendor or IT platform.

The first XBRL standard dates from July 2000; the latest published version is 2.1 from October 2004. This latest version is actually a correction document that is asked for approval for recommendation status.

Since the rules for publishing financial business information is applicable to regional rules and regulations, the standard provides a mechanism that enables the incorporation of the various national or regional regulations, as well as the usage of multiple languages for publishing purposes.

What's XBRL used for?

XBRL enables automated processing of business information by computer software, preventing laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data in an intelligent fashion, they can recognise the information in an 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.

By using XBRL, the processes of data collection can be automated to a high extent. It enables data from different companies, or company divisions for that matter, with different accounting systems to be assembled efficiently. Once the necessary data is collected in XBRL, all sorts of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, can quickly and reliably generate management reports and financial statements for publication aimed at a general or professional audience.

Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy as well.

What is XBRL?

XBRL is a complex standard. Of course this is so because the information required for business reporting is evidently complex. Despite this fact, XBRL does make life easier. One of the difficulties of processing financial business information is mainly caused by interpretation issues; finding out what a specific figure or number from a report actually means is not always clear. Depending on what name is used for a number and the context wherein it is used does make a difference.

XBRL solves this problem to a large extent because it gives a precise and extensive description of the meaning and role of each information component. XBRL is in fact a formal and agreed-upon taxonomy of business terms and subjects. This taxonomy is used as a basis for marking up the information in a business report. The combination of this mark-up and the actual information enables unambiguous interpretation of the information provided.

The XML standard is intended to allow for both human readability and machine readability for automated processing at the same time. Though this in fact is true for XBRL as well, it is not advised to actually read the XBRL in XML documents as they are. Since the taxonomy used is very precise, the names used for the information components are equally precise and therefore most of the time extremely long. A document filled with strings like:

"<ifrsgp:NetIncreaseDecreaseInCashAndCashEquivalentscontextRef="Current_ForPeriod" unitRef="U-Euros"
decimals="0">400000</ifrs-gp :Net IncreaseDecreaseInCashAndCashEquivalents>" just to identify and describe the value "400000" is not recommended.

Creating XBRL documents

Given the complexity of business reporting and the XBRL standard, it is very unlikely for anyone to create XBRL documents manually. Fortunately no one is required to go through this hassle. Almost all major vendors of financial software offer the option to export the information in XBRL format.

Beside these financial software packages there is a fair number of packages available for publishing and analysing XBRL data as well. A great advantage is that the internal complexity is resolved by the software. The user gets a nicely ordered and clear presentation of the information they require.

Localisation

In order to provide an answer for localisation issues - since the regulation for business reporting may differ from region to region - XBRL also offers a mechanism to provide additional or variants of information. These additions are in fact localised taxonomies. Worldwide, several governmental agencies are involved in defining the XBRL taxonomy that applies to their regulations and procedures. These localised taxonomies are required to connect to the standard taxonomy in order to ensure that the provided information remains comparable with information from other regions.

In a number of regions, like the UK and the Netherlands, these efforts have already reached a stage of completion where the governmental offices for taxes and for controlling the financial markets and stock exchange prefer to receive the information in XBRL. In fact, the expectancy is that it won't be too long before XBRL will become the required format for delivering information.

Besides the formal taxonomy, there is an option to provide information for textual labels that are used for publishing purposes. These labels are only used for presenting the information and don't affect the meaning or understanding of the information in any way. Obviously these labels are also used for publishing in different languages.

Start using XBRL and go for its full potential

In order to start using XBRL to provide financial information for exchange with partners and for tax and other regulatory filings, the financial software used should be updated in order to enable exports in XBRL format. If the currently-used software has to be replaced, it is advised to ensure that the new version of the software supports XBRL at least as an export format. Verifying that the vendor of choice is committed to supporting the XBRL standard in the long-term seems like a sensible action as well.

Once a XBRL document is available, it's perceivable that this is also used as a single source for publishing (parts of) the report to multiple media and for multiple purposes. Using standard XML methods and tools, the required fragments for each type of publication can be retrieved and transformed to a presentation format for printed publications as well as for electronic publications like websites, PDAs, cell phones etc.

It most likely will not be a trivial effort to realise this, but once done it enables swift and easy publication of up-to-date information. All that is required, essentially, is ensuring that the latest XBRL document is available for a publishing system.

For further information, please visit: www.diderottrack.nl

For further information on XBRL, its usage and definitions, please visit: www.xbrl.org/

The formal standard and schema for using XBRL can be downloaded from this address as well.