XBRL's Emerging Framework.

• Author: Marshall, Jeffrey
• Position: EXtensible Business Reporting Language

It isn't here yet, but XBRL -- yet another acronym in a business world laden with them -- is around the corner, and its eventual impact is expected to be profound.

So, what is XBRL? Short for eXtensible Business Reporting Language, it is a framework based on XML (still one more acronym, for eXtensible Markup Language) that would be freely licensed and facilitate the automatic exchange and reliable extraction of financial information among various software applications anywhere in the world.

"The initial goal of XBRL is to provide an XML-based framework that the global business information supply chain will use to create, exchange, and analyze financial reporting information including, but not limited to, regulatory filings such as annual and quarterly financial statements, general ledger information, and audit schedules," according to XBRL.org, the international group developing the specification.

More than anything, the emergence of XBRL -- which was recently reviewed by major corporations like General Electric and United Technologies -- is a testament to the Internet's insatiable appetite for data. The new specification, says XBRL. org, "leverages the efficiencies of today's Internet as today's primary source of financial information." Moreover, says Tom Vos, president of Edgar Online, "XBRL provides an efficient and reliable means of communicating financial information without changing existing accounting standards or requiring a company to disclose any additional information beyond that in its current financial statements."

"XBRL is an effort to put together what we consider to be the descriptor and rendering language for financial statements. It will allow us to electronically import or output globally standardized statements, eliminating the need for redundant entry and simplifying usability," says Jack Gregory, managing director at Moody's Risk Management Services, South Bend, Ind.

"The XBRL specification is critical to the financial reporting success of companies across all industries because it empowers people to employ the Internet as a highly efficient channel by which to communicate business information," said Chris Scherpenseel, president of FRx Software. "XBRL benefits everyone in the financial information chain, from staff accountants to controllers and CFOs."

The protocol is very cutting-edge, and won't likely be showing up in financial reporting for some time. Mike Willis, partner and deputy chief knowledge officer for the...