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XBRL is hot. Here are 11 reasons why

Checklist_4XBRL has been front-and-center in the world finance ever since the SEC issued its rule that large companies must start using the technology to file their financial statements in late 2008. Lots of people are praising it, a few are panning it, but one thing is certain: Finance folks will definitely be paying closer attention to it going forward.

We received an article recently from the folks who published XBRL for Dummies, an 84-page summary of the new data standard. I'm hoping to record a podcast with one of the book's authors, XBRL expert Dr. Wilson So, in the near future. In the meantime, the article offers 11 reasons why XBRL is raising eyebrows, and I think they're worth sharing with you. I'm quoting here directly from the article:

  1. It's the Napster of investing. XBRL will make it just as easy for anyone to download information about public companies in a form they can immediately use.
  2. It's interactive data. SEC Chairman Christopher Cox is quite fond of all of the things that you can make the numbers in a financial statement do with XBRL codes.
  3. It's the democratization of information. XBRL puts business information in the hands of individual investors. Now anyone can have instant access to accurate information and comparative analyses that previously only sophisticated research specialists could access.
  4. XBRL is a medium of information exchange.
  5. It's the universal language of business information. There are many reporting languages, but XBRL speaks the same language to everyone.
  6. It's standardized business information. Today, you have to unload and reload financial information from different sets of financial statements, different accounting systems, and different computer systems. XBRL makes all that unnecessary.
  7. XBRL is mistake-proof because it allows you to pass information back and forth without any loss of accuracy or context.
  8. It's agnostic information. Just like XML, which is its parent language, XBRL is happy to work with any platform or proprietary format.
  9. It's barcoding for information. XBRL lets preparers and users of financial information move numbers from place to place and track them wherever they go.
  10. It's an information recycling method. The same number can be put to many different uses, over and over again.
  11. It's information reverse-engineering. You can start with a big number, like revenues, and take it apart to find out what it's made of.

That's the word directly from the experts. Now tell us: Do you agree? Have you used XBRL yet, and if so, what's your reaction?


Bill Sheridan