Financial Reporting

XBRL, the eXtensible Business Reporting Language is now in use in over 50 countries and has developments in 50 more. It’s a way of reporting business results that can be read by any software that is compatible, and much of the world’s software for making and working with business results is now XBRL compatible. Started by Charles Hoffman in the late 1990s, XBRL has become such a successful movement that in 2008 the US Securities and Exchange Commission required XBRL for all public companies’ statements (over $500m in revenues). The SEC is now revamping its push-style database, EDGAR, into a pull-style set of semantic resources in the cloud. XBRL is easily the largest and best managed example of the semantic web in existence. Soon the ecosystem will expand to include derivatives, loans, stocks, insurance, and many other financial products.Some countries are even experimenting with XBRL as a way to file tax returns and other financial documents. There is an entire chapter on XBRL that explains the XBRL movement in simple terms, showing how the semantic web has already arrived. Tens of thousands of people are using it every day.

Transitional

The transitional approach has been voluntary filing, which started in 1998. Now many countries and exchanges have so much confidence in XBRL that they are mandating it. Soon the entire web of corporate financial data will become the backbone for a network of new information layers that will live on the cloud and provide at least some of the transparency we so badly need to get out of the financial information crisis.

Fully Semantic

Here are some of the companies and groups helping build this future:

External Links

Charles Hoffman’s blog is a great resource for those learning to work with XBRL.

Related Terms