The XBRL is an electronic reporting format mandated by the SEC and over 30 other regulators across the globe. It is the result of a push toward a universal electronic financial reporting standard, which would make financial information easier to retrieve and analyze. This move towards the digital ensures a more comprehensive format in which financial data is organized allowing for easier analysis and comparison across multiple enterprises.

            To be more specific, the key benefits of the XBRL are:

            – lighter reporting burden

            – costs are driven down

            – data is more timely

            – data is more accurate

            – transparency is increased

            – accuracy is increased

            – flexibility is improved

The XBRL is based on XML which is a data description language that describes the storage, exchange and manipulation of data over the internet. Taking its cue from the XML, XBRL treats data as an individual item, attaching an identifying tag to each item making it readable to a computer and thus easier to use interactively.

The idea of XBRL was born in 1998 from the mind of Charlie Hoffman, a CPA who worked for a small company in Washington State. His vision was to completely transform the way business reporting works. Receiving support from the AICPA he began to spearhead the development of XBRL. Basing the new language on XML he began building the standard that would become XBRL. XBRL International is the global consortium that is concerned with exchanging financial and reporting data in a timely fashion, with over 250 leading organizations from around the world taking part in the project.

The XBRL started seeing success in 2008 and since then it kept expanding. In the future it can be expected as the universal way a business reports its financial situation. The overwhelming benefits far outweigh those of traditional pen and paper reports. In the internet age, information can travel fast, and it can be manageable and easily malleable, and in the dynamic world of business, to overlook these benefits spells stagnation and later down the line death.

For a company, handling XBRL can be an internal process or it can be handled by a third party. This depends on where your business is and what you are looking for. Having XBRL as an internal process reduces costs, but at the same time could increase risks of having to amend your filings,  thus incurring increased costs in the long run.