XBRL DEFINED
XBRL, eXtensible Business Reporting Language, is a data tagging system developed, in part, to streamline the process for collecting, reporting, and sharing financial information between companies and over the internet.
XBRL works by adding specific identifier tags to each piece of financial data as dictated through standard taxonomies or through company custom extensions, thus creating a map or structure for a company’s financial information. The result of this process is an instance document. An instance document is a complete set of financial statements tagged with identification codes that can now be repurposed or rendered into a document ready to be filed via EDGAR, used for printing purposes, or used for posting to a company’s website.
Business Purpose
Implementing XBRL into a company's financial reporting process could help to improve its transparency and integrity, provide a higher level of audit scrutiny, and achieve greater corporate accountability.
This speaks directly to what some of the requirements under Section 404 of the Sarbanes-Oxley Act of 2002 tries to address. Under Section 404, companies are required to provide complete audit trails for all financial applications, when financial data is created in several applications and then exported and compiled into one statement. Furthermore, certain companies must report on management’s effectiveness over internal controls and have an external auditor attest to their internal controls in the firm’s annual filing with the SEC on Form 10-K.
Next >