What is XBRL?

Definition

XBRL (eXtensible Business Reporting Language) is based on XML and serves as a global standard for electronically exchanging business and financial data.

Purpose

It facilitates the electronic communication of business information, including both financial and non-financial data.

How XBRL Works

Tagging

Each financial and non-financial data element (e.g., revenue, net income) is assigned a unique XBRL tag.

Tags are standardized and machine-readable, enabling consistent interpretation.

Taxonomies

XBRL uses taxonomies that define and describe financial data elements. For example, taxonomies for different regulatory frameworks (e.g., US GAAP, IFRS) provide specific tags for compliance.

Instance Documents

XBRL instance documents include tagged data values (e.g., specific financial amounts). These documents are processed using XBRL style sheets to create readable reports.

Style Sheets

XBRL style sheets (using XSL) define how the tagged data appears visually (e.g., as HTML or PDF reports).

Benefits of XBRL

Efficiency

• Reduces manual data reentry and processing.

• Accelerates the preparation and submission of reports.

Accuracy

Ensures consistency and reduces errors through automated tagging.

Interoperability

Data is easily shared and reused across platforms, systems, and stakeholders.

Transparency

Enhances clarity for regulators, investors, and other users by standardizing financial reporting.

Customization

Allows users (e.g., analysts, regulators) to access data tailored to their specific needs using style sheets.

Applications in Business Reporting

Regulatory Compliance

Used by the SEC for financial filings in the US.

Internal Reporting

XBRL Global Ledger Taxonomy (XBRL GL) supports internal business operations by tagging detailed accounting data (e.g., journal entries).

Analysis

Provides granular, disaggregated data for deeper insights (e.g., sales by product or region).

XBRL has transformed business reporting by integrating advanced tagging and standardization, enabling businesses to produce and share financial data more effectively while meeting regulatory and stakeholder requirements.