XBRL, which stands for eXtensible Business Reporting Language, is a global standard for exchanging business information. It is used for regulatory reporting purposes, primarily financial, but quickly growing to other types of data for both US domestic, Federal and International regulatory reporting. XBRL provides a standard way to create structured datasets, making it easier for regulators to capture and analyze critical decision making information across companies and industries.
How does XBRL work?
XBRL works by providing a common definition for data, transforming what was once unstructured data into structured data without the expensive overhead and cost of a proprietary structured data format (e.g., database). Definitions are found in a taxonomy, which is a standardized set of tags and meaning for any type of data it is attempting to define. For example, in the US, the Securities and Exchange Commission (SEC) uses a taxonomy to tag financial data within the 10-K and 10-Q reports, making it possible for computers to process and analyze the financial data more easily. This makes it possible for financial data to be compared across companies and industries, leading to more efficient and effective decision making by investors and other users of financial information.
The benefits of XBRL
The benefits of XBRL include improved accuracy and efficiency in reporting, increased transparency, and enhanced comparability across companies and industries. XBRL makes it possible for financial data to be processed and analyzed more quickly and accurately, leading to more efficient and effective decision making by the stakeholders using the data (e.g., investors and other users of financial information). Additionally, the use of XBRL makes it easier for companies to comply with regulatory regulations, reducing the risk of errors and reducing the costs associated with regulatory reporting.
What is the SEC using XBRL for?
XBRL is used for financial reporting, specifically in the area of SEC filings. This includes the annual 10-K and quarterly 10-Q reports. It is a machine-readable format, which makes it easier for computers to process and analyze financial data. This makes it possible for financial data to be analyzed more quickly and accurately, leading to more efficient and effective decision making by investors and other users of financial information.
Conclusion
In conclusion, XBRL is a powerful tool for improving reporting and decision making. By providing a common data standard, XBRL makes it easier for computers to process and analyze data, leading to more efficient and effective decision making by investors and other users of information. As the use of XBRL continues to grow, it is likely to have a significant impact on the way data is processed, analyzed, and used in the future.