XBRL: here to stay: complying with, benefitting from SEC mandate.

• Author: Bourdon, Christopher J.
• Position: Financial reporting

if you haven't heard, the SEC has published rules requiring that most filers provide financial statement information in an "interactive data" format over the next three years. These rules have brought an increased focus on the benefits and challenges of extensible business reporting language (XBRL), the technical foundation for interactive data. Here's a guide to XBRL, the SEC rules and how your company might benefit from the investment in XBRL.

What Is XBRL?

In essence, XBRL is an openly developed global standard for more transparent, reusable and interactive data. It's being widely applied to business information in external company reports, as well as across internal corporate ledgers and subledger systems in a few cases.

Instead of treating financial information as a block of text--as in a standard internet page or a printed document--XBRL provides an identifying tag for each individual item of data.

For example, company net profit has its own unique tag. These lags form the XBRL taxonomy and allow computers to automatically search, retrieve and analyze information more efficiently and effectively. Overarching XBRL rules are provided so the codebooks can be modified by companies--through the creation of extension elements to address company specific needs without loss of understanding by others. The basic rules of XBRL are developed by a nonprofit organization. XBRL International.

U.S. generally accepted accounting principles are different than international financial reporting standards, so there are different codebooks for each, depending upon which regulations you're reporting under.

The use of XBRL for specific reports and regions is driven by local XBRL jurisdictional organizations, such as XBRL US, Inc., in the United States, governments (e.g. Australia or the Netherlands), securities administrations (e.g. ISA in Israel) or other groups. Many other countries have also formalized XBRL for their own regions. XBRL is being used for financial reporting and statutory reporting, especially in the banking industry; taxation; and even for the detailed information found within ERP systems to facilitate better controls and simpler consolidation and integration.

The SEC has invested more than $5 million to update the U.S. GAAP XBRL codebook of the financial reporting concepts. That inventory of disclosure concepts is necessary to communicate the facts in corporate filings. The improvements include more complete descriptions, definitions...