XBRL Research Brad Gustafson
Extensible Business Reporting Language (XBRL) is the newest upswing towards a
universal reporting language for publicly traded companies around the world. The program is
designed to have businesses report their financial data in a way that it can be imported
translated into customizable reports by the viewer that is meaningful. The system runs very
similar to a database software that allows you to input data and then use relationships to run
queries and reports to translate the raw data into useable information.
With the requirement transition to this reporting standard by the Securities Exchange
committee (SEC) public companies have had to incur expensive changes to be able to meet the
new reporting standards. The advantage of XBRL is that it can be used by any business,
government, or any entity.
For investors that are looking for an accurate way to compare companies without mixing
up data this new so%ware makes it easy. It is designed so that when you use the data provide
the comparison is between two “apples” and not one “apple” and one “orange”. It will also
work with other languages. XBRL can translate language from one country to another. This is
advantageous when looking to invest in foreign stocks, companies, or bonds.
How XBRL works with respect to the data or financial is that when you enter it you put it
in a format that the computer can read. This is called tagging. Important information such as
numbers and descriptions of accounts and details that you want the computer to recognize are
tagged so that it tells how to display it. For example if in a set of data you wanted to display
$45,000 you would write it in tagged form of <bold>$45,000</bold>. There is a much more
complicated detailed method to properly tag all information to be used properly by the
computer program.
XBRL Research Brad Gustafson
To really understand where this new standard is going and how it will change the world
of financial reporting, the history becomes an important understanding. XBRL was created for a
very specific reason. Uni#cation of a reporting standard accepted by all would revolutionize this
global and financial industry. The research point of this paper is to cover the history and the why
of XBRL.
Charles Ho:man a Certi#ed Public Accountant (CPA) is the founder of the extensible
business reporting language. According to an article published by the American Institute of
CPA’s (AICPA) called “The story of our new language” by Karen Kernan, Ho:man started out as a
CPA that went to businesses that were struggling with their financials and #x it. Ho:man
integrated the accounting systems of those businesses to help #x the financial problems.
