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XBRL: The Inside Story

After years of development, data tagging seems little more than a minor financial-reporting requirement. Yet some now say it could transform internal finance operations. Is this XBRL's true calling, or just more hype?

David McCann, CFO.com | US
August 24, 2009

XBRL drives towards information harmonization

One of the "hidden" benefits of XBRL, is information harmonization. After all, many organizations already have the financial information stored in relational databases, with their respective data dictionaries, naming conventions, and so forth. The most prominent benefits of XBRL have been documented in the business cases of Dutch, Australian, New Zealand and other governments (http://www.med.govt.nz/templates/MultipageDocumentTOC____35674.aspx) to provide faster, more reliable, and unambiguous access to the information within and outside of enterprises. The NTP project in the Netherlands allowed a reduction of the overall number of elements (tags) from 200,000 to around 10,000 or so. That spells millions in savings for every business that needs to maintain these systems. Another area that has not been addressed in the article will become critically important. Security and entitlement of information access. With the financial information being available for decision making, analytics, and mashup with other data sources within corporations it is necessary to provide element (XBRL concept) level security. Our firm recognized this need early on, and now offers administration, access audit, and entitlement management at the tag level.

Posted by Michael Roytman | August 28, 2009 12:42 pm

"SOX by Stealth"?

So far XBRL is relatively easy and inexpensive. But that is going to change, and the SEC and the XBRL community risks a backlash when the true nature of the effort if understood. As yet no company has performed the "detailed tagging" that will be required in each filers second year. Today it is relatively simple in that the filer has, in effect, a table of items to tag (the financial statements). Take each line, match it to an element, and tag it. Ok, there are a few tables, but again, fundamentally, it is a case of tagging line items. With detailed tagging that will change. The filer will need to deconstruct all the notes, and extract and tag all individual bits of date from within paragraphs, embedded tables, etc, across potentially hundreds, possibly a thousand-plus pages of 10K. In addition, the financial statements relate to approximately 4000 of the 16,000 (or so) elements in the US GAAP taxonomy. The other 12,000 elements relate to individual potential pieces of data/"facts" in the notes. This does not even include any company specific elements that will be created as extensions, which could be significant. So, today, simple. Take a line item, find an element, tag it. Next year, and for all other filers their second year, a whole lot more work. The SEC should be providing realistic estimates of the cost and time to perform the detailed tagging, or they will be accused of saddling business with another "SOX by stealth".

Posted by Daniel Roberts | August 26, 2009 02:01 am

XBRL HELL!@#$^, not spreadsheet hell

Just to start tagging info in any orgaisation would be a herculean effort. You need to teach the users how taxonomy works and each org needs to adopt and sometimes extend the taxonomy. How many accountants and sales/marketing personnel would bother to learn taxonomy? Spreadsheet is hell for those wdo have not undergone fromal training in Excel. Go to www.isanalytics.com/testimonial.php to view some of the benefits of formal training in Excel.

Posted by Kok Tang | August 25, 2009 11:31 am

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