Talk to me: XBRL makes business, financial reporting easier.

• Author: Willis, Mike
• Position: 2003 Technology & Business Resource Guide: Digital Age - Extensible Business Reporting Language

Company management must quickly spot problems and opportunities, know what is going on and know what to do in time to make a difference. But because data is typically stored in different places throughout an organization, getting accurate and timely information is often difficult. Enter Extensible Business Reporting Language, or XBRL.

XBRL is a new Internet language developed by the accounting profession. It is a royalty free, open standard that provides a common platform for business reporting and improves the reliability and ease of communicating financial data.

But what is XBRL and what can it do for you and your clients?

LEVERAGING THE INTERNET

XBRL alters the way information is exchanged on the Internet. To get an idea of how different XBRL-enabled information is from current Internet information, ask yourself:

1. How do I use the information my audit clients provide? Can I automatically download it into my applications so it can be summarized and analyzed?

2. How do other stakeholders use the information my audit clients provide? Are they tinkering with it, cutting and pasting it into worksheets for analysis?

3. How does my staff gather and disseminate client information for analysis? Can my staff exchange and begin analyzing information regardless of the disparate applications they work with?

With so much information available to CPAs electronically, it is astounding that they spend so much time and energy obtaining, assembling and assessing the data they use to do their jobs. Now there's help.

XBRL facilitates the use of information by enabling various software packages to share information. This means data is delivered from one software application directly into another.

And XBRL will be readily usable thanks to an agreement in the software industry to almost universally adopt the technology standard that enables software to use XBRL. Most companies have embedded this technology into their software, so most clients and accounting firms will have XBRL capability in their systems once applications are loaded.

DEMAND FOR FINANCIAL INFO

Investors, regulators and creditors have something in common: They want companies to provide more information more frequently. These demands have taken on more urgency in the wake of recent high-profile corporate collapses.

Regulators are stepping up their requirements for increased disclosure and tighter reporting deadlines. With reporting requirements already onerous, companies can turn to XBRL to...