AICPA establishes a language for electronic-based financial reporting.
The AICPA AICPA
See American Institute of Certified Public Accountants (AICPA). recently laid the foundation for a bridge that will allow CPAs to move more readily from a paper to an electronic economy. Using XFRML XFRML Extensible Financial Reporting Mark-Up Language (now Extensible Business Reporting Language, XBRL)
XFRML Extensible Financial Reporting Markup Language (extensible financial reporting markup language), the AICPA high tech task force developed a prototype that will help make electronic publishing of financial information a reality.
The new financial reporting language, XFRML, is derived from XML XML
in full Extensible Markup Language.
Markup language developed to be a simplified and more structural version of SGML. It incorporates features of HTML (e.g., hypertext linking), but is designed to overcome some of HTML's limitations. (extensible markup language See XML.
(language, text) Extensible Markup Language - (XML) An initiative from the W3C defining an "extremely simple" dialect of SGML suitable for use on the World-Wide Web.
http://w3.org/XML/. ). Like its close relative HTML HTML
in full HyperText Markup Language
Markup language derived from SGML that is used to prepare hypertext documents. Relatively easy for nonprogrammers to master, HTML is the language used for documents on the World Wide Web. , which is used on the Web, XML is used to code or tag information. The coded information is then accessible to many users across all programs.
The AICPA task force used its prototype and XFRML to create the first full set of XML-based financial statements. XFRML uses the same standards set forth by the World Wide Web Consortium (W3C (World Wide Web Consortium, www.w3.org) An international industry consortium founded in 1994 by Tim Berners-Lee to develop standards for the Web. It is hosted in the U.S. by the Computer Science and Artificial Intelligence Laboratory (CSAIL) at MIT (www.csail.mit.edu/index.php). ) in February 1998 for XML.
XFRML, which adheres to the existing rules for financial reporting, will have a significant effect on how financial data is exchanged in the future. IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Lotus, Microsoft, Oracle and other major software vendors have thrown their support behind XFRML as the language of business information exchange.
Publication of financial information in XFRML can save enormous amounts of time in researching and exporting information into other "XML-aware" applications.
For instance, before XFRML, if an investor wanted to examine all publicly traded health care providers with at least 500 clinics, a current ratio in excess of 1.75 to 1 and a "clean" opinion from their auditors, it would have been a time-consuming research project. An investor would have had to search the Edgar database (www.sec.gov/edgar hp.htm) and also do a manual search using a particular SIC code.
Using XML-based search tools, an investor will be able to accomplish this research in minutes, if not seconds, with a few simple keystrokes. Moreover, once the information is gathered, it can be imported into another XML application (an Excel spreadsheet, for example) by clicking on a menu item.
The next step in building this electronic/digital bridge will be to expand the application of the pilot project. To that end, several more prototypes will be deployed during the next six months. The next phase of the project will go beyond financial reporting and will involve developing models for XML-based financial transactions in collaboration with other groups.
XFRML is how financial reporting will be done in the digital 21st century. It will allow companies, investors, and industry analysts a way to prepare, publish, exchange and analyze financial reports and the information they contain. It will also allow financial information to be reliably and automatically extracted or exchanged between computer applications.
--Wayne E. Harding, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , Great Plains Software, Englewood, Colorado, former chairman of the AICPA high tech task force and member of the information technology practices subcommittee.