se of XBRL is gathering momentum. In September
2004, investors, analysts, public companies and
other securities market
participants—including CPAs—took note
of the SEC’s announcement it will permit
public companies to submit their mandatory
filings in XBRL format. This step by the SEC is
only the latest to demonstrate the steady
acceptance of the extensible business reporting
language since XBRL International Inc., a
nonprofit business consortium that includes the
AICPA, introduced it in 1999. More than 250 of
the world’s leading
organizations—including Morgan Stanley,
Microsoft Corp., major accounting firms and
accounting institutes—have embraced XBRL and
supported its adoption.XBRL
BASICS
Several earlier
articles (see “Prior JofA Coverage of XBRL”) contained a wealth of
XBRL-related information and resources readers
can tap to refresh their knowledge of the
fundamentals and/or to build a foundation for
understanding intermediate and advanced aspects
of XBRL—such as instance
documents—discussed in this and subsequent
articles in this series. In addition, exhibit 1 explains the elements that make up XBRL
and shows how they relate.
| Exhibit
1: An
Overview of XBRL |
| Specification:
Defines the technical
standard for the composition of
XBRL taxonomies. It’s the
set of rules that permits the
expression of business reporting
data in a format that complies
with XML, the extensible markup
language, of which XBRL is a
subset. |
| |
| Taxonomy:
Defines a set of data
elements in a given business
reporting context, such as U.S.
GAAP or international accounting
standards. It’s a controlled
set of tags and relationships
that provides standard
descriptions for the data
elements used in business
reporting. |
| |
| Instance document: The product
of a process by which an
individual or an automated
process uses software to add
“tags” to data elements
according to one or more XBRL
taxonomies. It’s an XML file
that contains links to the
taxonomies used, the financial
data described and the context in
which they can be found, as well
as links to supplemental
reference, presentation,
calculation, label and definition
information (see “XBRL’s Building
Blocks”). |
| |
| Application:
Software that can read
or write in XBRL format to create
or use XBRL documents. |
|
XBRL’S
BUILDING BLOCKS
To appreciate how XBRL works, CPAs need to
understand the concept of the instance document
(see exhibit 2), which
describes a financial data element, such as cash,
and contains
 References to the XML specification
and XML schema, or database structure.
References to the XBRL taxonomy and
any additional taxonomies that may be required to
describe all the XBRL tags used in a specific
instance document.
Links to
 References. Documentation
of the data elements the instance document
describes.
Definitions. The
location on a balance sheet where the data
elements reside.
Calculations and
formulas. Instructions on how the
data elements should be calculated in relation to
other such elements described in the instance
document.
Presentation. Details
on any descriptive labels that should be applied
to the data elements, including the
language—for example, German—in which
they should be reported.
Contexts. Other
information—for example, the type of
currency, accounting period covered or other
identifying facts—necessary to put the data
elements in proper context.
| Exhibit
2:
Illustration of an XBRL Instance Document |
 Source: Walter Hamscher,
Standard Advantage, Concord,
Massachusetts, 2004.
|
CREATE ONCE, USE REPEATEDLY
The information contained in an
XBRL instance document is endlessly reusable.
Each document has all the data necessary to
perform an analysis, prepare a report, conduct an
audit test and/or send information to software
that will use it for management reporting or any
other business purpose. With every data element
fully described in terms of its definition,
format, location, calculation and labeling,
XBRL-formatted information can be combined
easily, without rekeying or reformatting, for use
with a variety of software or hardware. XBRL
thereby provides information that’s
up-to-date, accurate and easy to distribute. 
NEAL J. HANNON, CMA, is a lecturer in
accounting and management systems at the Barney
School of Business of the University of Hartford
in Connecticut. His e-mail address is hannon@hartford.edu.
ROBERT J. GOLD, CPA, is a principal of R.J. Gold
& Company PC in Waltham, Massachusetts. His
e-mail address is robgold@goldgrp.com.
|
| XBRL
International Inc. Resources |
The group’s Web site (www.xbrl.org)
provides
An overview of XBRL’s functions
and capabilities (www.xbrl.org/whatisxbrl).
Questions frequently asked about XBRL
(www.xbrl.org/faq.aspx).
A technical information center (www.xbrl.org/technicalinformation).
Details on how to create an
XBRL-compliant financial statement (www.xbrl.org/specifications).
Descriptions of the benefits as well
as the issues involved in adopting XBRL, with
sections focusing on specific interest groups (www.xbrl.org/xbrlandbusiness).
The AICPA Web site (www.aicpa.org)
provides XBRL-related resources such as
An explanation of why CPAs need to be
involved in XBRL, how it will help those in
industry and public practice, and descriptions of
potential XBRL uses—such as in financial
statements, tax returns, regulatory filings,
accounting and business reports, authoritative
literature and audit schedules (www.aicpa.org/innovation/baas/xbrl/homepage.asp).
A Web-based video,
“XBRL—Real Solutions, Real Time” (www.aicpa.org/video/xbrl).
Prior JofA
Coverage of XBRL
“Finally, Business
Talks the Same Language,” Aug.00, page
24.
“A Napster for
Financial Data?” Jan.03, page 66.
“Tap Into
XBRL’s Power the Easy Way,” May04,
page 32.
The World Wide Web
Consortium’s site provides information about
the extensible markup language (XML), of which
XBRL is a subset (www.w3.org/xml).
The 11th XBRL International
Conference will be held in Boston, April
25–29, 2005 (www.xbrl.org/upcomingevents).
|
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