XBRL Education
What is XBRL?
XBRL (eXtensible Business Reporting Language) with roots in XML (eXtensible Markup Language), offers an effective means of "tagging," or
"marking up" financial documents with machine-readable code for transmission over the Internet.
XBRL is a world standard for business reporting that enables companies to identify financial facts in such a manner that financial information can
be compared by regulators and/or financial stakeholders on an apples-to-apples basis. Rather than have every company report information in
their own style (emphasizing and hiding information as they see fit), XBRL forces all companies to use standard classifications, and present such
information in a standard document that can be read (and analyzed) by a wide variety of software packages and viewers.
XBRL is now widely adopted by over 400 organizations in 11 global jurisdictions, including 19 stock exchanges and 10 country-wide taxing
authorities. The potential of XBRL as a standard for financial reporting has prompted the US Securities and Exchange Commission (SEC) to implement a
pilot project whereby public companies in the US can submit their financial system into the SEC'S EDGAR system in XBRL format.
Since XBRL must cover a wide variety of situations and various global accounting standards such as US generally accepted accounting principles
(GAAP) and International Financial Reporting Standards (IFRS), XBRL is complex and difficult to implement. With Rivet Software products coming
into common use, end users will be increasingly shielded from this complexity.
XBRL provides a number of benefits, including:
- Computer readable, transmittable over the Internet
- Global agreement on reporting standards
- Automatable, reliable re-use of data
- Reduce re-keying of information to reuse it
- Focus on numbers, not presentation
- Mechanism for building "dictionaries" of terms to be exchanged
- Extensible (extendable, flexible, scalable)
What is Rivet Software's role within XBRL?
As a growing number of governments, regulators and entities such as the SEC and the UK's Inland Revenue and Financial Services Authority drive the
adoption of XBRL, the vast majority of finance professionals are searching for help in the creation of XBRL reports. Rivet Software products are
designed to shield accounting and finance professionals from the enormous complexity of the XBRL standard.
Not the Same Old Edgar
Before the XBRL requirement, the SEC Edgar filing process was a technical exercise, requiring conversion of Adobe PDF™ or Microsoft Office™ documents into electronic form suitable for filing. By contrast, creation of XBRL documents require a solid understanding of accounting concepts. Every filing company must make many decisions about which XBRL elements to use, or whether to create a company-specific "extended" element. This process will require significant involvement from the filing company staff.
What is XBRL?
XBRL (eXtensible Business Reporting Language) is a powerful business reporting standard that fully leverages concepts that are the backbone of today's internet (XML and HTML). The eXtensible Business Reporting Language is a global standard that provides an effective means of "tagging," or "marking up" business documents with machine-readable code for transmission over the Internet. Although companies can still report information in their own style, XBRL provides an additional layer of standard classifications ("tags") that enables businesses and other organizations to present their information in a standard document that can be read (and analyzed) by a wide variety of software applications.
Outsourcing XBRL Filings
SEC filing companies may be able to use one or more of their current service providers, such as financial printers, SEC attorneys, filing services, or independent CPA firms (external auditors can review XBRL documents, but can't help create them). In fact, using a service provider or outside consultant will be necessary for most filers, but it is vitally important that XBRL filing preparers have a strong accounting and financial background.
Preparers must be intimately familiar with every number (and block of text) in a financial filing, and will even need to know why a particular presentation or accounting treatment was selected for certain information. Most preparers will not have all this information, but must have immediate access to someone who can make presentation decisions.
Audit & Internal Control Benefits
Every large public accounting firm is funding XBRL initiatives that will result in more efficient audit techniques to help them to better measure risk, and reduce fees. Deployment of the XBRL standard throughout an organization allows both internal and external auditors to access information in the same manner as financial reporting managers.
