XBRL - eXtensible Business Reporting Language - can make it easier to analyse, publish, use, and exchange finance-related information, providing accountants, analysts, competitors, investors, regulators and other stakeholders with access to cleaner, more transparent, and usable information. Despite this, it's been slow to catch on. But now, 20 years after an accountant came up with the idea, XBRL's use is set to dramatically increase.
Early adopters of XBRL included Denmark, Germany, Ireland, and Sweden, and its use is now widespread across the European Union. Stock exchanges from Australia to Japan already accept XBRL submissions or are developing XBRL systems, and it recently became mandatory in China (2007) and the US (2008). So, over the next few years, the adoption of XBRL by the world's listed companies looks inevitable.
Adoption by the Chinese Securities Regulatory Commission (CSRC) will increase XBRL use in Hong Kong and other parts of Asia, the phased introduction of XBRL in the US (between now and 2010) will increase its use among companies in the US and beyond. The CSRC already receives XBRL filings from around 1,400 public companies in China. From December 2008, 500 of the world's largest organisations will use XBRL to file quarterly and annual reports with the US Securities and Exchange Commission.
As its use spreads, a great many finance professionals will need some level of XBRL awareness, whether they are working in business or practice, for a big organisation or small business - and ambitious student accountants will be able to exploit this. If you can demonstrate an understanding of, or have experience of, working with XBRL, you will be able to significantly boost your career potential. So what do you need to know, and how can you learn it?
The technology can be confusing; even the name is misleading. XBRL is not a language, but a 'standard' that describes financial information using tags, or labels. They work in a similar way to bar codes, and once an XBRL 'tag' has been used to describe an item such as 'inventory' or 'elements de stock' - it becomes easier to identify, regardless of national and international differences in reporting standards, languages, and terminology.
Nowadays, accountants can focus on the functions, capabilities and tools surrounding XBRL. An understanding of the concept and of some of the specific taxonomies (the techniques available to review XBRL reports), and of how to map concepts from a chart of accounts or trial balance to XBRL elements, will all be valuable.
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