Magazine article Online

XBRL: Overcoming the Skepticism of Global Regulators

Magazine article Online

XBRL: Overcoming the Skepticism of Global Regulators

Article excerpt

ACCORDING to XBRL International (www .xbrl.org), XBRL (eXtensible Business Reporting Language) is a technology that supports the representation, use, and transmission of business information from companies to their different regulatory bodies and to end users of these data. It provides an effective and efficient way to safely search, process, store, and transmit data. The reason is simple: Each data point is correctly tagged, by means of a set of tags--taxonomies--generated by a public consensus. This process has implications for information professionals and the companies that supply them with corporate financial data.

This free standard was created in 1998 by Charles Hoffman. The University of Huelva started working with XBRL in 2000 on behalf of XBRL Spain, when contacts with academicians and regulators in the U.S. and EU were consolidated. We never thought that those XBRL projects could provide not only technical but also socio-technical knowledge. Direct participation in the XBRL implementation projects presented key issues concerning technology acceptance. Surprisingly, we found the pre-existing technical level of each regulator could be an obstacle.

EXPLAINING XBRL

The so-called markup (or metadata) languages have generated great interest among academicians and practitioners involved with online information exchange systems. In particular, XML has become one of the most widely-used meta-languages. Unlike the well-known HTML, XML is not restricted to a fixed number of tags. It allows users to define their own structure using any number of tags necessary for the encoding task. HTML mainly provides the visual format, not metadata, for the data transmitted. In recent years, new developments, such as XML Schema to define content and structures and XLink to contact resources, were taken into account to create XBRL.

The accounting field was quick to recognize the importance of XBRL. In its CPA Journal, the American Institute of Certified Public Accountants named XBRL one of the top 10 technologies in 2004 (www.nysscpa.org/cpajournal/2004/ 404/perspectives/nv11.htm). More recently, in the same journal, Troy J. Strader discussed the potential impact of XBRL on four categories of data quality in financial reporting: Intrinsic, accessibility, contextual, and representational (www.nysscpa.org/cpajournal/2007/1207/essentials/p68 .htm). Among the descriptive terms associated with XBRL, best articulated by Colm O hAgonhusa in his article "The Journal Taxonomy: SBRL GL and the journey toward a single, timely, consistent version of the truth" (Accountancy Ireland, Vol. 37, No. 5, pp. 72-74; www.accountancyireland .ie/dsp_articles.cfm/goto/1149/page/Journal_Taxonomy_: _XBRL_GL_and_the_journey_towards_a_single,_timely,_con sistent_version_of_the_truth.htm), are "better, faster and cheaper." But the way in which XBRL is accepted to support communications is not always the same. It depends directly on the technical sophistication of the candidate regulator.

TAXONOMIES AND XBRL

XBRL is structured through the creation of taxonomies. Not only are there files of plain text and .xml that contain the real information to be transmitted--that is, the XBRL report--but there also exists a global reference, a taxonomy, written in the same metalanguage. Situated on the internet (www.xbrl.org), it contains the dictionary of elements and the set of rules against which each XBRL file that is created and transmitted can be validated, with respect to origin or destination. The taxonomy is thus a dictionary of XML labels that includes precise definitions on their utility, logical relationships, and calculations, labeled in multilingual natural language, with articulated relationships of order and visual presentation.

The taxonomies can be imported by software of all types. They allow the creation of XBRL reports, which now contain the real data associated with each of the predefined fields. …

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