Breaking through: XBRL gains momentum: after being hyped for more than a decade, extensible business reporting language (XBRL) has gained legitimate legs, bringing improved reporting conventions and easier translation between accounting programs.

• Author: Spieker, Sandy

Imagine having access to real-time financial data for any public company. Imagine transferring data from one accounting program to another without the added cost of custom programming, sifting, sorting or rekeying. Such is the promise of XBRL.

That promise is becoming a reality thanks to influential support from the Securities and Exchange Commission (SEC). The XBRL initiative is being positioned as a way to not only streamline the delivery of financial information, but make it easier to use the information as well. The hope is that the increased transparency of financial information will boost investor confidence and dovetail with international convergence.

What is XBRL

"XBRL is one of the most significant business reporting developments in the last 10 years," said Ohio Society member Michael R. Dickson, CPA, CITP, CISA with Plante and Moran. "While many business executives don't yet understand or appreciate XBRL, some of the largest financial institutions in the world, and the SEC, are well aware of the capabilities and benefits of XBRL."

"Simply stated, XBRL is a standardized tagging system that defines financial and nonfinancial data used in business reporting processes. The gist of XBRL is to facilitate the generation and dissemination of different types of financial and nonfinancial reports from a single database of tagged elements. For example, a single tag set of data could generate reports for filing financial statements in several different languages, or under different accounting standards. Thanks to XBRL, reporting to the Chinese government, the banker around the corner or the SEC is no longer a month-long process," Dickson said.

Why you should care

XBRL will offer many benefits to those involved with financial statements. For many CPAs, the biggest benefit is the ability to easily move information from one program to another without rekeying.

"Before the Federal Deposit Insurance Corporation (FDIC) adopted XBRL, the data collection and validation process was cumbersome and time-consuming," said FDIC Vice Chair Martin J. Gruenberg. "Multiple file formats and inefficient legacy systems required substantial manual effort and resulted in significant delays. FDIC analysts had to spend up to three weeks manually checking data quality following submission."

XBRL also makes financial data more comparable across industries. "One hidden value is that using an XBRL taxonomy, an investor or business stakeholder could download tagged data...