Coming out party: SEC program allows companies to file financial info using XBRL.

• Author: Gray, Glen L.
• Position: XBRL UPDATE

Like a debutante, XBRL is being introduced to society. Although former SEC Chairman Arthur Levitt first mentioned XBRL in 2000, it was not until 2004 that the SEC embraced XBRL with the release of two documents--Concept Release: Enhancing Commission Filings Through the Use of Tagged Data, www.sec.gov/rules/concept/33-8497.htm, and Proposed Rule: XBRL Voluntary Financial Reporting Program on the EDGAR System, www.sec.gov/rules/proposed/33-8496.htm.

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A BRIEF TUTORIAL

XBRL is an open standard for using XML to tag and define financial and business reporting information. For example, a company could use XML tags to identify net income as 1000000. However, if every company created its own tags, it would be difficult to search and analyze the data from different companies.

To solve this potential problem, the XBRL International consortium created the XBRL specification for using XML for financial and business reporting. From this specification, taxonomies are derived that provide the details for using XBRL for specific types of reports, like tax returns, accounting entries and financial statements for specific generally accepted accounting principles.

XBRL International's members have collaborated on several taxonomies and more are being developed. The International Accounting Standards Committee Foundation has released the International Financial Reporting Standards General Purpose Financial Reporting for Profit-Oriented Entities taxonomy that can be used for IFRS general purpose financial statements.

With this new XBRL technology comes some XML terminology, including: an "instance document"--an actual set of financial statements created with XBRL--and "linkbases," which are repositories of labels, relationships, calculations and other information that would be common to instance documents.

For example, defining the relationships between assets, current assets and inventory would be applicable to many balance sheets. So, instead of putting all of this common information in each instance document, the company can put the information in linkbases and then put links in their instance documents to the applicable linkbases.

THE SEC AND XBRL

Public companies must file various documents with the SEC, which are stored in EDGAR, the SEC's online database.

Starting in 1984, EDGAR filings used ASCII formatting with SGML tagging used in the filing's header. (SGML is the parent of both HTML and XML.) Starting in 1999, registrants were...