iTechNote

XBRL or Extensible Business Reporting Language is a member of the family of languages based on XML, which is a standard for the electronic exchange of data between businesses and on the internet. The rich and powerful structure of XBRL allows very efficient handling of business data by computer software as well as human reading (example).

XBRL International, the organization that focuses on the progress of XBRL, has 15 established jurisdictions and 6 provisional jurisdictions across the globe. The organization publishes two documents about XBRL - XBRL Specification and XBRL Taxonomies. Each jurisdiction promotes XBRL and organizes or sponsors the creation of taxonomies, notably for the main accounting standards for business reporting in its area.

The latest Recommended Specification was updated on 7 Nov 2005 with a version number of 2.1. With the support of more about 450 major companies, organizations and government agencies, XBRL is steadily getting its place in the global business community.

The Register has a report today about the so-called Big 4 accounting firms pushing for a change in financial reporting. They suggest replacing current historic reporting with real-time reporting. This is possible with the application of XBRL or similar technology. The members of the Big 4 are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG.

Real time reporting would enable individuals and institutions with financial or other forms of stakeholder interest to deconstruct data more easily, publishing their own views and comments through tagging of data. While financial analysts already do this, they are constrained by the quantity, quality and timeliness of information available by corporations.

It is expected that the application of XBRL in real-time reporting will bring better market price transparency but heighten market risk and volatility.