What Is eXtensible Business Reporting Language?
Let me explain XBRL to you directly: it's eXtensible Business Reporting Language, a software standard I know was created to improve how financial data gets communicated, making it simpler for you to compile and share that data. Notably, XBRL is built on XML, which is extensible markup language, a spec used for organizing and defining data online.
XBRL applies tags to each piece of financial data, so you can use it programmatically with any XBRL-compatible program. This setup allows for straightforward data transmission between businesses.
Key Takeaways
- eXtensible Business Reporting Language (XBRL) is a freely available global framework of accounting standards used for exchanging business information.
- XBRL is based on XML coding and is a standardized way of transmitting financial records around the world.
- The most current version of XBRL, v2.1, was published in 2003 and has remained stable. Several optional modules exist as add-ons.
Understanding eXtensible Business Reporting Language
Picture this: you're checking a company's financial statements on their website. In the old way, these would just be plain text. If you wanted to analyze those numbers in a spreadsheet, you'd have to manually type or copy-paste each account and its number.
But if that data is in XBRL, you can convert it straight from the site into an XBRL-compatible spreadsheet program, usually in an instant.
Because of the standardized tags and the language itself, financial data from one country using standards like U.S. GAAP can be compiled into another country's drastically different standards without hassle. Not all companies are required to report in XBRL, but it's become so common that I suspect it won't be long before everyone has to use this language. There's also iXBRL, where the 'i' means inline, which lets you embed XBRL metadata right into an HTML document.
XBRL started in 1998 with version 1.0 from the American Institute of Certified Public Accountants (AICPA). The latest version, v2.1, was set in 2003. That standard has stayed stable, but various XBRL modules have been added that you can plug in for new features or better operability.
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