Many of the world’s top financial institutions have formed a consortium to promote a new XML-based specification for exchanging financial reports over the Internet.
The group, the XBRL Project Committee, expects to launch the specification by July 1, the American Institute of Certified Public Accountants, the group’s founder, announced in early April.
The new specification was designed to simplify the exchange of financial data by introducing a universal system of XML tags that will identify the function of each piece of financial data. Currently, several different — and incompatible — formats are used to publish this data.
The specification’s creators say that this will eliminate the need to retype data that is already available and will make it easier for organizations to handle complicated financial information.
The specification — Extensible Business Reporting Language (XBRL) — is also backed by top financial service companies such as Standard & Poor’s, Arthur Andersen, Deloitte & Touche, Morgan Stanley Dean Witter & Co., Ernst & Young, KPMG and PricewaterhouseCoopers. Other members include the Canadian Institute of Chartered Accountants, the International Accounting Standards Committee, the Institute of Chartered Accountants in Australia, and the Institute of Chartered Accountants in England and Wales.
The initial release in July will cover specifications for publishing a company’s financial statements in XBRL, said Mike Willis, a partner at New York-based accounting firm PricewaterhouseCoopers and chairman of the XBRL Project Committee.
Willis said XBRL (formerly code-named XFRML) won’t be used for individual transactions, but for high-level aggregate data, such as that included in quarterly sales reports, for example.
XBRL will ultimately affect any company that processes financial reports or uses them on-line, according to a statement by Keith Macbeath, director of strategic planning at financial information publisher Reuters Group PLC in London. Reuters is considering using XRBL to help it acquire, process and deliver financial data.
The new specification was designed to be compliant with generally accepted accounting principles, said David Ulrichs, an accounting research manager at Deloitte & Touche.
Other specifications, which will cover regulatory reports, tax filings and other business event reports, will be issued within the next 18 to 24 months.
“We will be producing a large matrix of electronic dictionaries with different taxonomies for each geography and industry,” Willis said.
“We have vendors such as SAP who are already working to integrate XBRL directly into their software, so when their customers want to run their financial statements, XBRL is an option,” said Christy Reichhelm, an enterprise resource planning industry manager at Microsoft Corp. who is also a co-chair of the public relations and communications working group for the XBRL Project Committee.
The specification will be a free download that is relatively easy to plug into existing software, Willis said.
More information about XBRL can be found at http://www.xbrl.org/.