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XBRL: a multitalented tool: XBRL can save time and money and facilitate information analysis.

CPAs have a rare opportunity to help the business world take a giant leap forward. The extensible business reporting language (XBRL) can vastly improve the timeliness, accuracy and flexibility of data in financial statements and other business reports. Many experts think it will boost today's commerce just as double-entry bookkeeping led to clearer financial statements that attracted investors and stimulated the Industrial Revolution. To help their clients and employers reap the benefits, CPAs need to understand how XBRL can upgrade a variety of business functions, including the representative sample this article briefly describes.


Put XBRL to work in

* Fair value accounting. Tagging assumption disclosures in XBRL formats would make management's choices more transparent to users and easier to compare with those of other companies--and take away some observers' worries about the reliability, of corporate managers' fair value determinations.

* Financial statement preparation. XBRL makes it easier to create and document financial information and reduce manual intervention. It can help CPAs integrate disparate systems and apply and monitor internal controls, reducing the burdensome costs related to the Sarbanes-Oxley Act of 2002.

* Mergers and acquisitions. Using XBRL as a universal standard will allow companies to integrate and improve information sharing with regulators, investors and other external entities--and dig out of the morass of useless data that often accompanies corporate consolidations--without moving to uniform hardware or operating systems.

* Compliance. New SEC rule amendments enable public companies to voluntarily submit XBRL-tagged information as exhibits to some required filings. Participating companies still must submit these filings in traditional electronic format, but the voluntary program will show how XBRL can help improve report quality and usefulness to investors and other end users.

* Standard setting. XBRL complements the objective of a single set of high-quality, understandable and enforceable global accounting standards and makes it easier to accurately compare financial statements across borders. XBRL also could be a defining factor in the principles vs. rules debate, as seeing all the information in the same format simplifies validation of management's judgments and adjusts company-issued information to suit individual analytical purposes.

* Investment and credit analysis. XBRL reduces research costs and makes it easier to create financial models and compare companies' performance and solvency. While virtually all company information is publicly available, few but professional analysts can locate and understand much of it. Tagging data in XBRL improves transparency without additional disclosures and makes more information available to everyone. Making information more accessible also benefits the capital markets, which depend on timely and reliable business data to allocate investments, and helps public companies meet accelerated filing deadlines.


XBRL benefits all members of the business information supply chain. It's time for companies, government agencies and firms to fundamentally improve business reporting by adopting XBRL.

XBRL: A Structure for Business Data

This article continues the JofA's coverage of how XBRL can help CPAs, their clients and employers, regulators, investors and other end users issue, obtain, analyze or translate into other formats--on any computer system--complete and accurate business information.


XBRL International Inc. Resources

The group's Web site ( provides

* An overview of XBRL's functions and capabilities (www.xbrl. org/whatisxbrl).

* Questions frequently asked about XBRL ( aspx).

* A technical information center ( information).

* Details on how to create an XBRL-compliant financial statement (

* Description of XBRL-enabled applications ( tools).

* Descriptions of the benefits as well as the issues involved in adopting XBRL, with sections focusing on special interest groups (

AICPA Resources

* The AICPA Web site provides extensive XBRL-related information and resources at xbrl/homepage.asp.

* XBRL Essentials (# 093017JA), containing a tutorial and practical information, such as tips on using XBRL to meet business needs, is available at or from the AICPA at 888-777-7077.

* "XBRL--Real Solutions, Real Time" a free Web-based video (

JofA articles on XBRL:

* "XBRL Revisited" (Feb.05, page 64 or jofa/feb2005/hannon.htm)

* "Tap Into XBRL's Power the Easy Way" (May04, page 32 or

* "A Napster for Financial Data?" (Jan.03, page 66 or www.

* "Finally, Business Talks the Same Language" (Aug.00, page 24 or

Other Resources

* The World Wide Web Consortium's site provides information about the extensible markup language (XML), of which XBRL is a subset (

* The 11th XBRL International Conference will be held in Boston, April 25-29, 2005 (

COLLEEN SAYTHER, CUNNINGHAM, CPA, is president and CEO of Financial Executives International. Her e-mail address is
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Title Annotation:extensible business reporting language
Author:Cunningham, Colleen Sayther
Publication:Journal of Accountancy
Date:Apr 1, 2005
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