XBRL: The Language of Finance and Accounting
What Is It?
The eXtensible Business Reporting Language (XBRL) is a language for capturing financial information throughout a business' information processes that will eventually be reported to shareholders, banks, regulators, and other parties. The goal of XBRL is to make the analysis and exchange of corporate information more reliable and easier to facilitate.
In order to deliver or report information in a consistent form, the creators of XBRL expect the resulting vocabulary to affect the format of the business information throughout the entire life cycle of that information, from the initial creation of invoices, orders, and other documents and actions, through the collection, aggregation, and reconciliation processing done in the financial departments, and eventually, to the reporting formats such as regulatory filings, statements, and corporate reports.
Organizations store much of the same information in their own internal systems, but in widely varying formats and granularity. This is common, even between businesses that share the same financial software products. This inconsistency makes it difficult for organizations to share information reliably or cost effectively when performing many aspects of their business, including applying for credit, reconciling accounts, or reporting to investors, or many other common activities.
To further complicate the problem, the way a single field or element of information is defined can be affected by jurisdictional regulations. The value of an asset may be defined quite differently in the U.S. than in other parts of the world that observe different accounting principles and practices. Hence, there may be many different actual definitions of a single element type such as "asset value", or "price", or other seemingly simple bits of data. These distinctions affect a wide range of organizations since there aren't many large companies that operate in a single regulatory jurisdiction anymore.
XBRL creates a vocabulary for describing exactly which bits of information are being included in a report, even to the point of taking regulatory jurisdiction and other variances into consideration.
Where Does It Come From?
XBRL originally began as work in the American Institute of Certified Public Accountants (AICPA), the U.S.-based national professional organization serving the accounting profession for more than 100 years. One aspect of the AICPA mission is to establish professional standards, in how accountants behave, perform, and communicate information. In other words, they define the principles and terminology used in that jurisdiction and all developed countries have an equivalent organization setting standards for their constituency.
Since a goal of XBRL is to facilitate data interchange globally, and AICPA is focused on the United States, the XBRL folks quickly resolved to form an international organization, XBRL International (http://XBRL.org), which would coordinate similar activities in each jurisdiction, where a local XBRL "chapter" would represent its specific needs. The structure of XBRL now recognizes both regional jurisdictions as well as various industry domains involved in business reporting.
There are currently 13 active jurisdictions listed on the XBRL web page as well as instructions for establishing new ones. Ten jurisdictions are active within XBRL. These are Australia, Canada, Denmark, Japan, Netherlands, New Zealand, Singapore, U.K., U.S., and the International Accounting Standards Board (IASB), with four additional provisional members in Spain, Hong Kong, Ireland, and Korea.
What Are They Working On?
In the world of vertical industry groups, Accounting & Tax Preparation is one of the biggest categories, and should be thought of as a mega-category of sorts. Every business has to account for and report information, whether private or public, profit or nonprofit, and regardless of what types of products or customers or location you work in. That is why several nearly distinct "industries" fit together in this larger grouping. There are currently six officially recognized, related industry domains called Supply Chain Communities (SCCs) that are actively involved in business reporting as well as several others not yet formally recognized by XBRL. Those officially recognized include Accountants, Analysts, Intermediaries, Software & Service Providers, Regulators, and Investors/Creditors. Each of these types of organizations perform a role that are either suppliers, recipients, or both, of business reporting information.
As you may have realized from this background information, the job of creating the taxonomies and processes to be used for reporting business information globally is a large undertaking. Currently, the work is divided into eight general Working Groups (WG) with domain-specific working groups being created as needed. The eight general WGs are Specification, Domain Basel II (Taxonomy), Marketing & Communication, Education, Research, Grants, and General Ledger. Over 170 organizations have joined XBRL from around the world and interest is high.
What Else Is There?
XBRL is envisioned as a standard that can be used in just about any business, and the hope is that many vertical industries will avoid reinventing the wheel when they try to define common components not unique to their particular area. But some areas already have invested a lot of time and effort in creating vocabularies and applications that use them that fit easily into the scope of XBRL. One of the best examples is the Financial Services Industry (actually another one of those mega-industries that is made up of several sub-industries such as Banking, Bonds, Securities, Risk Management, Software & Services, Regulation, and so on). There are many standards and specifications that have come out of Financial Services that overlap or relate to XBRL. These generally focus on executing specific financial transactions using a single vocabulary (for example, RIXML, FIXML, MDDL, IFX, and OFX). Some view XBRL as the logical opportunity to serve as a unifying common language to either enhance these specific standards or serve as an interchange format between them.
Similarly, other standards from organizations such as OASIS and other bodies have overlaps that could benefit from a common language for business information. For instance, there is some interest in rationalizing, if not actually coordinating, work being done in the OASIS UBL (Universal Business Language) TCs and ebXML (Electronic Business eXtensible Markup Language) TCs. UBL and XBRL have established formal liaison relationships to coordinate and communicate activity. In fact, XBRL has many official liaison relationships and is interested in working with other groups in the hope of leveraging and building upon standards from such groups as, for example, the UN GREFIS (part of the UN electronic commerce standards organization that focuses on insurance risk standards and processes).
How Does It Work?
XBRL represents a broad set of taxonomies. These taxonomies consist of a W3C XML Schema modeling descriptions and a classifications system for information found in financial statements and other business reporting documents, plus supporting documentation and XLink links to other supporting files. Taxonomies may represent hundreds of business reporting concepts with mathematical and definitional relationships, along with text labels in multiple languages, references, and display suggestions.
Taxonomies may receive recognition from XBRL in three different levels. Recommended taxonomies are considered to have the same official status of the XBRL specification itself. Approved taxonomies are compliant with XBRL and were either developed under XBRL processes or similar ones. Acknowledged taxonomies are compliant but were developed by other organizations under their processes. All recognized taxonomies are available for use royalty free. The current state of an XBRL taxonomy of Public Working Draft means further work may continue, but Final means it is complete and will be permanently available at the XBRL web site.
To follow is a sample of a raw XBRL data instance. It precisely describes key financial information, including that Rock Gravel Corporation is reporting a numerical content for the calendar year 2000 in Hong Kong dollars (HKD) with a precision of up to four digits.
<numericContext id="rg.cy00.hkd" cwa="false" precision="4">
<entity>
<identifier scheme='http://www.gov.hk'>rg</identifier>
</entity>
<period>
<startDate>2000-01-01</startDate>
<endDate>2000-12-31</endDate>
</period>
<unit>
<measure>iso4217:hkd</measure>
</unit>
</numericContext>The following example shows an XBRL instance indicating that,
related to the previous numerical content via the id= attribute,
and according to the rules of the Generally Accepted Accounting
Principles (GAAP), Rock Gravel Corporation had operating costs of
HKD $358,300,000 in that year:
<?xml version="1.0" encoding="UTF-8"?>
<gaap:opc numericContext="rg.cy01.hkd">-3583000000.</gaap:opc>
These snippets of XBRL instances only give the slightest indication of the power and complexity of financial reporting data and XBRL itself. To date XBRL taxonomies have an aggregate total of over 3,500 defined elements. The complexity of these interrelations are managed through a sophisticated set of XLinks.
Financial statements can be created in XBRL in several ways. Several XBRL-aware accounting software products support XBRL as a native import and export format. These tools allow users to map charts of accounts and other structures to XBRL tags. XBRL can be created manually or generated from a reporting system. XBRL can be generated from EDGAR-formatted information using transforms found on several web sites, allowing users to leverage their EDGAR generation applications. Or, similarly, other formats can be transformed as a back-end process. It is likely that a combination of these will be used by companies wishing to exchange information in XBRL.
Version 2.1 of the conformance suite, made up of hundreds of example taxonomy fragments (W3C XML Schema and XLink files) and instance documents, containing both valid and invalid usage, was completed December 31, 2003.
Who's Using It?
XBRL is enjoying many examples of adoption, and is currently in live use for some critical financial industry applications. Some highlights from an extensive list of development based on XBRL include:
- U.K. Inland Revenue is using XBRL in electronic filing based on XBRL-UK GAAP Taxonomy
- Australian lending (LIXI) information being collected from all Australian banks in XBRL
- Sumitomo Mitsui Bank of Japan integrated XBRL as interchange format for letters of credit for international trade as part of complex supply chain application
- The Tokyo Stock Exchange has been accepting corporate financial information in XBRL format since early 2003
Vendors have also shown a lot of support for XBRL. For example, 100 percent of all North American tax preparation software vendors have committed to supporting XBRL as an interchange format for importing and exporting data from their systems. More examples can be found at the XBRL web site in its XBRL Progress Reports (from the main menu at http://www.xbrl.org select What is XBRL > XBRL Progress Reports).
Issues & Challenges
The future for XBRL is not without its challenges. Some issues that face XBRL implementers are the daunting changes and development that will be needed when the EU consolidates versions of accounting standards currently under GAAP standards in 2005 under the International Financial Reporting Standards (also known as International Accounting Standards,) which will affect all 7,000 listed corporate entities in the EU. Estimates for systems-enhancement costs for global banks alone range from £20 to £100 million pounds, more than half of it in IT costs. The goal of this change is to provide consistency and transparency in financial reporting information. Sound familiar?
Even though XBRL seems well suited for the task, this is still a daunting amount of change to manage, and some will have to be convinced that a new format will make it easier. Some critics still claim that XBRL is too complex, so not everyone has been won over yet. Still others respond that it is only as complex as the underlying data models in use by the governing bodies.
According to Walter Hamscher, executive director of XBRL International, "Like any standard that has to do a point release, we have to manage expectations around stability--the fact is that XBRL 2.1 is a big step forward not so much in terms of incompatibilities and such, but it is so much more solid, well tested and worked through--we are working with vendors to get them onto 2.1 with all possible speed. I think there is still a deficiency of off-the-shelf vendor software that is properly enabled relative to the scope and sweep of XBRL's applicability. I think we need more open source. Many end user organizations will see that as an obstacle, although regulators, interestingly, don't seem concerned by that because their planning timelines stretch well beyond this or next quarter and they already see XBRL as inevitable."
ResourcesFor additional information on XBRL specifications and activities visit http://www.xbrl.org. Additional information on XBRL is also available at the XML Cover Pages at http://xml.coverpages.org/xbrl.html. |
Share your comments or questions on this article in our forum.
(* You must be a member of XML.com to use this feature.)
Comment on this Article
| Titles Only | Titles Only | Newest First |
- A. Locksmith Los Angeles 877-364-5264 Locksmith Security Services, Los Angeles Locks, Safe & Vault Sales and Installation.
2008-12-21 12:47:05 services123 [Reply]
A. Locksmith Los Angeles 877-364-5264 Locksmith Security Services, Los Angeles Locks, Safe & Vault Sales and Installation.
For All Your Home & Business Needs Doors installation wood, metal, Kalamein, and fire rated wood doors for both heavyweight commercial and standard residential needs. Door Closers Panic Bars Fire Exit Devices Floor or Head Check Bolts Door Frames Hinges Buzzer Systems Card Access Elevator Doors magnetic door locks, electric strikes, CCTV install Dvr Video Camera master key systems, CCTV and video surveillance, Alarm Systems, Keyless Entry Systems and Access Control, Iron Works specializes in custom exterior and interior wrought iron design. We design and hand forge wrought iron entrance gates, driveway gates Child guard gates A/C cage gates Elevator doors Backyard gates Fire exit gates Custom design gates Storefront and Commercial Rolling Access Control Automotive Lockout Tools & Kits CodeLock Pushbutton Locks Cylinders Deadbolt Style Gate Locks DigiLock Digital Locks Door Closers Door Locks Electromagnetic Locks Electronic Hardware Exit Hardware Four Drawer Key File Gate Locks & Weldable Gate Box Government Locks High Security Locks Hospital Locks IEI Digital Pushbutton Locks Key Blanks Key Cabinets & Key Storage Key Cutters Key Tags and Key Rings, Key Towers Knob and Lever Gate Locks Locker Locks Locker, Cabinet & Furn. Locks Locksmith Tools and Equipment Manufacture Line Items Misc Hardware Misc Locking Devices NEW PRODUCTS Omni Lock Pepper Spray Picks and Pick Sets Pins and Pinning Kits Pushbutton Gate Locks Pushbutton Locks Re-Keying Safes Schlage Simplex Parts Simplex Pushbutton Lock Simplex, CodeLock, Trilogy Specials Training and Education Trilogy Digital locks Von Duprin Window Locks Patio Door Locks Padlocks.
Locksmith in Los Angeles (877) 364-5264
- Carpet Cleaning Los Angeles , CA 818-386-1022
2008-11-24 17:14:03 orellytos [Reply]
Carpet Cleaning Los Angeles, CA 818-386-1022
Full Service Carpet Cleaning Mattress Cleaning, Upholstery Cleaning, Area Rug Cleaning
We offer carpet cleaning services such as; Steam Cleaning, Dry Cleaning, green organic carpet cleaning, Fabric Lounge Suite Cleaning, Leather Lounge Suite Cleaning, Tile & Grout Cleaning, Mattress Cleaning, Wet Shmapoo Carpet Care / Water Damage Restoration, Air Duct Cleaning for: offices, homes, restaurants, clubs and hotels
Los Angeles areas
- Locksmith Los Angeles 323-678-2704
2008-11-21 10:39:26 Movingcompany [Reply]
Locksmith Los Angeles 323-678-2704
lockout services locks installation rekey doors locks
24 hour locksmith in los angeles
- Free tool for xbrl (based on Saxon)
2005-05-30 04:36:00 lulus [Reply]
I have been looking for free tools to process xbrl .
After my researches I found that they exist,but ther is no reference about it in any web page of XBRL internacional or related web pages.I thing that they shoud appear.
Maybe I'm wrong in my apreciation,maybe this tool is not mature and that's the reason why it don't appear in the program list of xbrl international.
I will try to test it during the next days.
You can find them on this webpage http://www.xbrlopen.org
The main program is ABRA and is based on Saxon.
It's great to see that there are free tools to use with xbrl and what surprise me and fills my heart of joy is that they are developing a graphical interface for the program.
- XBRL does not use XML Schema
2004-03-14 02:51:21 John Schlesinger [Reply]
One of my biggest complaints against XBRL is that it claims to use XML Schema and, indeed, XBRL taxonomies look a lot like schemas, but in fact they are not schemas. What this means in practice is that a validating parser that supports XML Schemas, such as XERCES, is not capable of validating an XBRL document fragment and so it is necessary to invest in other tools for validation.
In fact, I am not completely convinced that XBRL document fragments are XML at all. Sure, they use angled brackets and look a lot like XML, but they cannot be validated using either a DTD or an XML Schema.
You should be very wary of thinking of XBRL as XML as you may be mislead into thinking that existing XML tools and middleware will be useful.
- XBRL most certainly does use XML Schema - and then some
2004-03-15 19:24:01 Hugh Wallis [Reply]
As so often happens, even in the most inaccurate of criticism there lurks a grain of truth. Indeed a couple of grains of truth lurk in Mr. Schlesinger’s comments on XBRL but they are completely eclipsed by the reality of the total story.
The two grains of truth lie in the phrases: "…taxonomies look a lot like schemas, but in fact they are not schemas..." and "...it is necessary to invest in other tools for validation...". However his other assertions completely nullify the effect of these snippets by their inaccuracy. Notably "...XERCES, is not capable of validating an XBRL document fragment..." and "...Sure, (XBRL document fragments) use angled brackets and look a lot like XML, but they cannot be validated using either a DTD or an XML Schema."
So – let me help to put this all to rest.
First and foremost XBRL IS XML. There is no question about this. As David vun Kannon mentions, many thousands of XBRL documents have been perfectly well processed as well formed XML by almost every XML processor under the sun. Not only that but, since the XBRL standard states that XBRL is XML and since it states that XBRL instances shall be valid according to XML Schema, it is, prima-facie, XML Schema valid XML. I think that Mr. Schlesinger’s confusion might arise from a lack of understanding of what XBRL taxonomies are and what their goals are. To boil it down to fundamentals, an XBRL taxonomy is a way of describing a very rich set of semantics for business reporting information that is expressed in XML. XML Schema goes only a very small way to providing the mechanisms for expressing such semantics and is used as much as it can so that, at the most basic level, an XBRL instance can be schema validated. The additional parts of XBRL taxonomies are all expressed using the W3C RECOMMENDED XML Linking standard (they linkbases as defined by that standard) which has been found to provide a very rich and flexible way to describe complex, layered, extensible semantics of XML instances.
In the development of the 2.1 version of the specification, three independent software vendors, using a variety of XML Schema tools, validated hundreds of conformance suite tests incorporating standard XML Schema validators including XERCES as well as those provided by a well known software vendor from Redmond, Washington into their product offerings, thereby again completely refuting Mr. Schlesinger’s assertion. However, XML Schema validation is only a part of the story. In order to validate XBRL as valid XBRL, yes - additional software is necessary. This phenomenon is true of any other standard, XML based or otherwise. The additional software is necessary to determine if the rules of the standard that cannot be expressed using XML Schema (which, even its authors would acknowledge, is not capable of many things – take co-occurrence constraints as a small example) have been obeyed. So, yes Mr. Schlesinger, it is necessary to invest in other tools for complete validation. However it is definitely NOT the case that exisiting XML tools and middleware will (not) be valuable – it’s just that they won’t do the whole job for you. I challenge anyone to name any XML based standard that provides as rich and sophisticated a semantic capability as XBRL that can be processed and completely validated using standard, off the shelf, all purpose XML tools.
It is also worth mentioning that there are some XML tools that make marketing claims to "validate XBRL" and yet fall far short of being able to do anything more than basic XML Schema validation of XBRL instances - and some of the more well known ones fail repeatedly in even that due to bugs in their implementation of the XML Schema standard, as can be observed from discussions on various XML Schema mailing lists. Before basing any judgement of any standard on some all-purpose tool's claimed ability to process it I would suggest that one should examine the tool's claims rather than casting aspertions on the standard itself. In the case of XBRL 2.1 that question is simple to ask. It is "Has your tool passed the conformance suite published by the body that defined the standard?".
Hugh Wallis
Chair, XBRL Specification Working Group
Co-editor, XBRL 2.1, Specification
Vice-Chair, XBRL International Steering Committee
- XBRL does not use XML Schema
2004-03-15 08:07:04 David vun Kannon [Reply]
John,
Before slinging around broad assertions such as this, you should check your facts.
Many people experienced problems with the original XBRL 2.0 schemas that were released in 2001. These schemas contained an ambiguous content model, though at the time of release not all XML Schema tools noticed or cared. Subsequently, more tools did notice, the problem was reported to XBRL International, a fix was developed and published as XBRL 2.0a in 2002.
XBRL 2.1, which was published as a recommendation at the end of 2003, comes with an extensive conformance suite of tests, all of which are built upon the foundation of XML Schema validation. As someone who has been involved in the design of XBRL since 1999, I can say from personal experience that XML schema validation for every kind of XBRL document has always been a goal since we dropped DTDs in favor of XML Schemas in going from 1.0 to 2.0 of the core spec.
One of the frustrations of of the XBRL design team has been the inconsistency with which XML Schema has been implemented in commercial and academic tools. XBRL relies heavily on substitution groups in XML Schema. Support for this feature is spotty at best in some products.
I can't speak directly to your problem using Xerces, but if you had to use "other tools", were they other tools that claimed to do XML Schema validation or not? There is an implicit acknowledgement in your statement that different tools reach different conclusions because they implement the XML Schema spec differently. That is not a problem that can be laid at the feet of any spec, XBRL, SVG, or anyone else, that is trying to build on top of XML Schema.
Complaints about processing problems that are sent to the xbrl-public group on Yahoo are always answered promptly (as are most mesages!). XBRL members have met with product development groups on problems with specific products, and have gotten assurances in some cases that the problems will be fixed in the next release.
Your further comments about XBRL and XML say more about the author than the subject. What tool are you using that rejects any XBRL document (to be precise, from the 2.1 conformance suite) as not well-formed XML? Our team at KPMG constantly processes XBRL 2.0a and 2.1 documents using commercial XSL tools in both Microsoft and Java based environments. If you can't do as much, upgrade your tools or your thinking or both.
Cheers,
David vun Kannon
KPMG LLP
- XBRL does not use XML Schema
2005-01-16 16:27:09 Jonathan_Green [Reply]
Mr. Kannon,
I noticed in your signature you work for KPMG. I just wanted to drop a quick note on what an excellent tutorial your company has made available through the following site:
http://www.us.kpmg.com/microsite/xbrl/train/86/86.htm
I spent the last few hours going through it and just finished. Needless to say I feel I have a reasonable grasp on the topic now and it sparked my interest enough to do further research and find this post.
For others who are new to the subject I would suggest the KPMG tutorial to gain a solid base.
Regards,
Jonathan Green
- XBRL does not use XML Schema
2004-04-03 20:47:17 Jamshed Mehta [Reply]
David,
Could I use your
"upgrade your tools or your thinking or both."
clause as a proverb/adage in presentations. Do you want your name also put as the author?
Cheers,
Jamshed F. Mehta.
- XBRL does not use XML Schema
2007-05-28 21:29:15 WillKriski [Reply]
I personally wouldn't use this quote to create more tension and hostility. This sort of attitude is why people get frustrated with open source projects that don't have proper documentation, GUIs, tools, etc and when the creators come across as arrogant when people ask questions. You would be wiser to spend your time explaining the XBRL technology through tutorials, viewer/validator tools and the like, in order to increase adoption.
- XBRL does not use XML Schema
2005-09-16 09:21:54 Rob_Cowie [Reply]
Don't do it! Only someone with a sense of smug superiority would use such a phrase. True or otherwise, is that what you want? Besides, someone might think your work for KPMG and you really don't want that.
- XBRL does not use XML Schema
- XBRL does not use XML Schema
- XBRL most certainly does use XML Schema - and then some
