TryXBRL is a new information resource with XBRL-tagged financial statements for over 12,000 publicly traded corporations. The purpose is to educate financial statement preparers and users on new capabilities for analyzing financial data with reduced cost, time, and complexity. So what is XBRL or eXtensible Business Reporting Language and why should you care?
XBRL is revolutionizing business reporting through electronic communication of business and financial data. The old days of accountants issuing static reports which require laborious and costly processes of manual re-entry and comparison to work with the data are coming to an end. Computers can treat XBRL data "intelligently": they can recognize the information in a XBRL document, select it, analyze it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information. (ref: http://www.xbrl.org/Home/)
XBRL is part of the family of "XML" languages used to communicate tagged data on the internet. The idea behind XBRL is smart data. Instead of treating financial information as a block of text and numbers in a web page view or a PDF file, XBRL identifies each individual piece of data with identifying tags. The tag is based on a standardized list of accounting terms, technically described as taxonomies. For example, the Gross Profit number of $950 million for the 2nd quarter of 2008 might be tagged with “U.S. Dollars”, “Gross Profit”, “2nd Quarter”, and “2008”. These XBRL tags are computer readable and remain connected to the specific piece of data. The power of tagged data becomes important when for example, a comparison is made of gross profit across all industry competitors. Finding the data, comparing, and analyzing the data is much more efficient if it is in XBRL format.
The Securities and Exchange Commission (SEC) is expected to issue rulings in 2008 mandating that companies provide their financial statements in XBRL format. SEC Chairman Christopher Cox has described the benefits of tagged financial statements as “The Promise of Interactive Data”. Stay tuned more changes are coming as accountants leverage technology!