In countries around the world, authorities have mandated or are in the process of mandating that company accounts and tax returns be submitted in XBRL or iXBRL format. This is an interactive data format type which radically changes financial and business reporting.
Taxonomies are dictionaries used by iXBRL / XBRL. They define the specific tags for individual items of data (such as "net profit").
Different taxonomies are required for different financial reporting purposes. Different XBRL jurisdictions may have their own financial reporting taxonomies to reflect their local accounting regulations. Many different organisations, including regulators, specific industries or even companies, may require taxonomies to cover their own business reporting needs.
XBRL stands for eXtensible Business Reporting Language. It is one of a family of "XML" languages which is fast becoming a standard means of communicating information between businesses and on the internet.
XBRL is a language for the electronic communication of business and financial data which continues to revolutionise business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information.
In particular, XBRL offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.
iXBRL (inline eXtensible Business Reporting Language) is a further development of XBRL. It is a user-friendly hybrid that combines the XBRL data tags with HTML formatting that makes it possible to view a reproduction of the accounts in a web browser.
HMRC in the UK utilises iXBRL rather than XBRL, as does the Revenue in Ireland:
No-one “owns” XBRL, it is open source. XBRL is being developed by an international non-profit consortium of major companies, organisations and government agencies. It is an open standard which is free of licence fees, and implementations of XBRL are growing rapidly around the world.
The idea behind XBRL, eXtensible Business Reporting Language, is simple. Instead of treating financial information as a block of text - as in a standard internet page or a printed document - it provides an identifying tag for each individual item of data. This is computer readable. For example, company "net profit" has its own unique tag.
The introduction of XBRL tags enables automated processing of business information by software, thereby cutting out laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data "intelligently"; they can recognise the information in a XBRL document, select it, analyse it, store it, exchange it with other computers, and present it automatically in a variety of ways for users.
XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.
Companies use XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyse data much more rapidly and efficiently if it is in XBRL format.
XBRL handles data in different languages and conforming to different accounting standards, and can be flexibly adapted to meet different requirements and uses.
Financial statements can be transformed into XBRL/iXBRL with mapping tools, or converted automatically with suitable software.
For a more detailed view of XBRL, see the following pages of XBRL International website:
