Examining XBRL: new technology to modernize how corporate America reports to investors.

• Author: Pryde, Campbell
• Position: Techissues - Extensible Business Reporting Language

there's a new technology standard making headlines today that you need to be aware of. Extensible Business Reporting Language (XBRL) is gaining a strong following among regulators, investors and analysts. This standard was designed to achieve increased efficiency of public company reporting and improve the accuracy of data out in the marketplace.

[ILLUSTRATION OMITTED]

The SEC has made it clear that XBRL is the future of financial reporting by publishing a rule proposal that, if enacted in its current form, will make XBRL submission to EDGAR mandatory, starting in the first quarter of 2009. But even for private companies, XBRL is an important initiative to follow and consider adopting. Ultimately interactive data will be used in the internal financial systems of a company to improve the accuracy, useability and speed of reporting and internal analysis. In addition, regulators globally are using the standard for Central Bank and tax reporting for both private and public companies.

What is XBRL?

XBRL is based on extensible markup language (XML), which is a way of presenting information uniformly on the internet so that web-based applications can process and exchange that information easily. It can apply to any number of business reporting applications, such as the reporting of bank institutions' call reports or public company financial statement data submitted to the SEC in U.S. GAAP format.

XBRL applies identifiers, or "tags," to each element being reported that help to define that element with a presentation label, computer label, definition and other information such as units, currency, etc., depending on the reporting application. The definitions assigned to each element become the agreed-upon standard used by all stakeholders to that reporting application. As a result of using XBRL, terms and entities referred to by different names by different organizations (or even different departments within a single organization) become standardized, eventually, around the globe.

For example, a company may call its tax expense "income tax expense (benefit)" while another company may call it "provision for income taxes"--with XBRL, both companies can use different names but the underlying tag for the term is the same.

XBRL data can be reused and repurposed. Each piece of business information such as "net income" or "EPS" has detailed information packaged with it that makes it machine-readable for automated processing, extraction and analysis. Once...