XBRL: ‘The curtain is rising on Act 2’
More than 400 executives from some 40 countries converged on Paris for the 19th XBRL International Conference, and the big news was the evolution of the data tagging language itself. XBRL, say those in attendance, has moved beyond mere compliance and financial reporting and is proving its mettle as a solution for reducing costs and increasing competitiveness.
"This conference is a sign that the curtain is rising on Act 2 for XBRL," Mark Bolgiano, CEO of XBRL US, said in a conference call from Paris. "It's clear that XBRL is being used for all sorts of non-financial reporting activities. The momentum has taken us beyond a completely compliance-driven environment to one that's being driven by cost and competitiveness."
As proof, Bolgiano pointed to a recent collaboration between XBRL US, the Depository Trust and Clearing Corporation (DTCC) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to "fundamentally change" the process of announcing corporate actions. The collaboration will use XBRL to capture and standarize information as a corporate action is announced, "bringing greater accuracy and reducing risks and costs by improving transparency and communication between issuers and investors."
Then there's the example being set by Nevada Controller Kim Wallin. Here's how XBRL International describes it:
In a white paper co-authored with Liv Watson, vice chair, XBRL International, and Shweta Gupta of IRIS Business Services, Wallin outlines how XBRL can achieve a long-envisioned objective of providing an integrated platform across various agencies within a state government, thereby simplifying the costs of doing business.
“Currently, new businesses need to go to the Secretary of State, then to the Department of Taxation, then to Unemployment, to DMV to register vehicles, to the city, to the county, etc., to obtain all the permits, licenses and so on to do business in the state,” she says. "And every place you go, you have to fill out a form with your name, address, ID number -- basically the same information at each location. If you use XBRL in a business portal, you would fill out name, address, ID number, etc., and then the data can go out and populate the other systems. If you do it without the XBRL, systems don't talk to one another."
The ultimate goal, Watson says, is to create and approve an XBRL taxonomy for this type of stuff so that all states can put it to use.
Imagine applying XBRL to every area in which governments are being strangled by informational red tape. The potential savings are huge. And not a financial report in sight.
That's not to say financial reporting has taken a back seat. Starting with their June 15, 2009 quarter, the 500 largest public U.S. companies are now required by the SEC to use XBRL to file their financial statements. We'll take a closer look tomorrow at what the SEC -- and at least one public company -- have learned from the process thus far.
In the meantime, check out these other XBRL resources:
- Virtual workshop examines reality of XBRL
- Competing to find XBRL solutions
- XBRL International
- XBRL U.S.
- SEC resources
- IASB resources
- The ABCs of XBRL: Here's what it can do
- XBRL case studies
- Demonstrations of XBRL in action
- More demos: Microsoft | Edgar Online | Rivet Software Crossfire | Google OneBox
- XBRL taxonomies
- Six Steps to XBRL (from the Journal of Accountancy)
- ROI on XBRL (from the Journal of Accountancy)
- Improved Business Process through XBRL
- Benefits and uses for business