Companies & XBRL

The abbreviation XBRL stands for eXtensible Business Reporting Language. It is based om XML and is being developed as a freely available, open, and global standard for exchanging business information. Two of the earliest adopters are the U.S. Federal Deposit Insurance Corporation (FDIC) and the Committee of European Banking Supervisors (CEBS).
XBRL consists of an XBRL ‘instance’ which contains primarily the business facts being reported, and a collection of taxonomies (called a Discoverable Taxonomy Set (DTS)). These define metadata about these facts, such as what the facts mean and how they relate to one another. The current (2008) version of XBRL is 2.1, with corrections. More background information is available in Wikipedia and a specific XBRL website.

Many large US and internationally operating companies have started posting XBRL files on websites in addition to filing them with the government organizations like the Chamber of Commerce. In 2009 a study was carried out by the North Carolina University and it was found that the XBRL filing contained errors. I do not know how much the XBRL filings have improved the last few years but it is hazardous to take XBRL filings at face value.

The development and use of XBRL to file and report financial statements remains a big step forward, because it makes it easier to use and compare financials statements. This is true not only for investors but also for researchers and students. A study done in 2011 showed that the adoption of XBRL will definitely make it easier to get and evaluate information on company performance and governance.
One of the newest developments is the creation of a Global Reporting Initiative taxonomy (see also an earlier blog post on GRI). This taxonomy will make it easier for companies to also use XBRL for sustainability reporting. The taxonomy is available on the GRI website.

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