HTML - XML - XBRL - iXBRL - what's it all about?
As the UK Government finalises its draconian plans to implement XBRL filing of Company Accounts in 2011 and the US SEC has imposed mandatory filing in XBRL on about 500 companies this year, Microsoft loses out on an obscure patent stopping it shipping Word with embedded XML.
So what's all the fuss about? XBRL (Extensible Business Reporting Language) has been around for 10 years - it's a form of XML (Extensible Mark-up Language) which has been around a lot longer. A mark-up language is a dictionary of tags that allows a computer program to describe the text. So Word uses its own 'tags' to describe the text e.g. paragraph, capitals etc. HTML (Hyper Text Mark-up Language) is a basic mark-up language used for web-pages. XML is a generic form of tags enabling marked-up text to be used for a variety of applications e.g. mobile phone text messages, eCommerce etc. It was developed by the WWW (World Wide Web) consortium as an open standard. XBRL takes these tags a stage further and describes the environment that a set of financial accounts have been drawn up e.g. year, period, account name etc. All of these tagging tools are designed to be read my computers - they are gobbledygook to the untrained eye.
To help mere humans read these formatted messages Microsoft embedded HTML and XML tags into its Word and Excel programs to enable documents structured in these formats to be read and exported in its word processor and spreadsheet packages. You can imagine Microsoft's astonishment when a little know Canadian software house, aptly named i4i, patents the idea of linking XML to Word in 1998 and proceeds to sue Microsoft in the US courts earlier this year - and wins an injunction to stop Microsoft selling Word with this functionality. But wasn't XML an open standard?
It's the same problem that the UK Government has with its XBRL filing in 2011- the XBRL is designed to be read by computers - not humans. So how do we, when submitting the return, and the tax inspector, receiving the information, read what we have sent. The latest answer is a new concept called iXBRL - Inline Extensible Business Reporting Language - a bridge between HTML and XBRL to enable XBRL documents to be read by humans. Its new - few applications can use it - initially it may be expensive.
At the moment online filing of Corporation Tax in the UK uses a mixture of XML and pdf (Portable Document Format). Most of us can read pdf files using free downloadable software. But we cannot generate our documents in pdf unless we buy an application (only on PC's -provided free on Apple computers). However most accounting systems now have a pdf generator built in to enable their customers to generate the financial accounts. It is a problem exporting the computation sheet, usually developed in a spreadsheet, in the pdf format. Microsoft still does not provide a pdf converter in its Word and Excel packages.
It's still unclear if HMRC will allow Corporation Tax supporting documents (statutory accounts and computation sheets) in pdf format after 2011 - their objective is to get this information in XBRL. Hence iXBRL - which will certainly not be as readily available as pdf generators are now. I doubt if Microsoft will be an early adopter of iXBRL in its Office Suite.
Personally I am slightly wary of XBRL. The advantage of PDF is that it is a good equivalent of a piece of paper, what the recipient sees is exactly the document that was sent with minimal scope for errors or presentation differences caused by the program used to view it (try opening documents with Word/Excel then Open Office and see how many look alike).
Switching to XBRL to me signals a shift from submitting documents to submitting data.
Posted by :Dave | August 18, 2009 6:28 PM
I totally agree with your comment - XBRL is about submitting data not documents - the problem is that humans, in the end, have to read it.
Posted by :Dennis Keeling | August 18, 2009 8:18 PM
My fist contact with the XBRL concept by virture of my contact as as subsriber with Edgar online,i probed further into its implication and became fasinated due to its multi-diamesional suitability especially as it offers a ready vehicle to convey IFRS and provide a platform for the enthronement of tranparency,comparability and like metrics in the financial and business reporting supply chain.
We on the other side of divide and also an itegral part of the financial world must be assisted by the developed economy to enale us apply it and sustain it, you need tyo know the challenges.
Posted by :Johnson O OLUATA B.Sc (Hons) CFE. FCNA | August 19, 2009 11:08 PM
I would be interested in knowing if an XBRL variant has yet been established for non-governmental organisations (eg charities).
Posted by :Ken Ashford | August 20, 2009 10:53 AM
As an accountant in practice I think the Revenue are pushing their luck as my corporate clients accounts are ultimately produced in Xcell, so how am I to convert them to iXBRL without reinputting the data, ie links from an Xcell sheet to an iXBRL sheet within Xcell ?????
Posted by :Tom | August 21, 2009 5:52 PM
Just a comment on the PDF facility on MS Word and Excel; MS Office 2007 allows an add-in that converts *.docx and *.xlsx into *.pdf.
Posted by :carla castro | October 17, 2009 6:06 PM
Much as I personally appreciate the new trend XBRL in business and financial reporting,we can not pretend to have all the basic infrastructure that needed to be on ground for it to be implemented.
I believe the advanced economy is able to fast-track the implementation of XBRL in their jurisdiction by reason of the abundance of facilities that are in place.
I am an adherent for XBRL ,I eagerly look forward to its earliest implementation here in spite of the challenges that must be addressed well in advance, we need the full support of the developed economies to do all these.
For the purposes of planning, we must be caary out advance diagnosis and prescption,This must be based of the outcome of surveys that needed to be administered either off-line or and on-line.
In view of the above, it will appear wise to have neccesry machinery in place for the purposes of carrying out some research on how best to implement XBRL in the developing economies .
Thank you.
Johnson
Posted by :Johnson O OLUATA B.Sc (Hons) Accts,ACIArb,ACTI,CFE,CICM,FCNA. | October 28, 2009 6:00 PM
Quite a few people interested in whether Microsoft are making any moves in the XBRL space. Well, the answer is yes, but not the inline flavour. Their Dynamics ERP system exports all the major documents, balance sheet, cashflow etc, but these are useless unless you run this package, (this might interest readers of this column who run it in an Enterprise). But the likelihood of it appearing as a bolt on to MS Office is at least 3 years away (I've been trialling MS Office 2010 and it's not in that, so make it 4-5!). Anyway, inline XBRL is currently UK only so this shortens the odds significantly. If you'd like to know more about converting Office docs to iXBRL, check out www.arkksolutions.com/ixbrl.html For more details on what Microsoft are doing go to http://www.microsoft.com/msft/FAQ/xbrl.mspx. There's a useful article on there called "The Road to Better Business Information: Making the Case for XBRL"
Posted by :Richard Metcalfe | January 11, 2010 7:23 PM
It seems that we, in the UK, are missing the point of XBRL from the perspective of management and financial accounting. In the states it seems to have been in use by large corporations for some time who can use it's power internally to analyse financial information, not only more quickly, but with a significant reduction in human error - if you are using it already it is a short step to filing and making returns in XBRL. HMRC should have set about selling the idea of XBRL as an accounting tool, and a very powerful one, to which filing returns could have been added, rather than simply making it obligatory and resented. Google XBRL, look at what it can do from an analysis point of view and you may wonder why we haven't already adopted it in the UK.
Posted by :Paul Soper | February 16, 2010 11:51 AM