XBRL Basics - How does it work? 

XBRL enables preparers to utilize software to tag all financial items in their business reports to the elements within a taxonomy.  This is accomplished with an Instance Document which can be electronically exchanged and validated between computers or viewed in a human readable format (this is called rendering).

XBRL US has published a guide which is available on the XBRL US Web site to help preparers of financial statements get started in creating XBRL financial statements.  The XBRL US Preparers Guide, which the AICPA was involved in creating, provides rules and rule of thumb for using XBRL technology for financial statement reporting. 

Below is a list of frequently used terms and explanations of how XBRL works:

What is a Taxonomy?

A taxonomy is a grouping of financial concepts (known as “elements”) in which each concept is defined  (similar to a dictionary).  Additionally, the taxonomy also defines the relationships between the concepts within the group.  Therefore, if we are working with a balance sheet item such as Cash, the taxonomy would include the definition of Cash and would also demonstrate how Cash may relate to other balance sheet items (within the taxonomy) such as rolling up to Current Assets and eventually Total Assets. All three of these items (Cash, Current Assets, and Total Assets) are financial concepts that are defined and presented in the taxonomy as elements.  Public taxonomies have been developed by market constituents and are maintained by XBRL.

The US GAAP Taxonomies contain over 15,000 elements representing commonly reported financial concepts for US GAAP financial statements and are available and maintained by XBRL US.

What is a Taxonomy Extension?

The X in XBRL stands for eXtensible. Therefore, if a particular concept does not already exist in a public taxonomy there is the ability to add to or change the elements to meet the company’s needs; called extending the taxonomy. This extensibility is one of the most important aspects of XBRL because it allows for wide adaptation and uses of XBRL.

What is Tagging?

Tagging is the process of applying the entity’s unique financial data to an element within the taxonomy. The tagging process is performed during the creation of an instance document.

What is an Instance Document?

An instance document is the file that includes the company specific business reporting information in a structured manner that computers can intelligently recognize and exchange.  It is expected that instance documents will be created for individual financial reports (e.g., annual reports, earnings releases, submissions to creditors, etc.). The instance document is an XML file where everything comes together; here the entity specific data links (tags) to the elements in the taxonomies to form the XBRL document that can be validated and transmitted automatically for utilization by numerous consumers.

What is Rendering?

As we stated above, an instance document is an XML file that is computer readable.  Rendering is the process in which XBRL software will translate an instance document into a human readable format.

XBRL Tools

In order to work in XBRL, you will need software. There are a number of XBRL tools in the marketplace today.  Some tools enable you to work with taxonomies (i.e., creation, extension, and validation), others focus on the instance document (creation and validation). There are also tools that will specialize in rendering, analysis, and reporting.  Some tools may offer one or more of these services within the application while others may only focus on one function. You can refer to the XBRL US Web site for details on vendors that support XBRL.

Open Hide documents in this section

Page  1 2
Showing results 1 - 15 of 21
Order by:

XBRL Events

Conference Events, presentations and webcasts related to XBRL with topics covering the Securities and Exchange Commission's Interactive Data and other educational opportunities.
Published on August 11, 2017

XBRL US Center for Data Quality

Article The XBRL US Center for Data Quality is a market driven initiative to improve the utility of XBRL data.
Published on August 11, 2017

Guidance Statement of Cashflow

Guidance The XBRL US Data Quality Committee has released draft guidance for the Statement of Cash Flows for public comment and feedback.  This draft guidance will be available for public comment until September 5, 2017.
Published on August 11, 2017


Article Complete overview of XBRL, including its background, how XBRL works, potential benefits and uses, summary of SEC Rules for Interactive Data.  There are also links to XBRL related webcasts, articles, cpe products, Q&As and comment letters.
Published on May 18, 2017

AICPA Comments to SEC on Inline XBRL Rule

Comment Letter The American Institute of CPAs is pleased to comment on the SEC’s Proposed Rule on Inline XBRL Filing of Tagged Data.
Published on May 18, 2017

Principles and Criteria for XBRL

Article Principles and Criteria for XBRL-Formatted Information provide preparers, reviewers, auditors and users with a tool to evaluate the quality of XBRL Files.
Published on March 10, 2017

AICPA Principles and Criteria for XBRL

Article Provides preparers, reviewers, practitioners and users of information formatted in XBRL a basis to evaluate the XBRL files.   These principles and criteria were developed by the XBRL Assurance Task Force (under the AICPA Assurance Services Executive Committee), which recognized a need for a more consistent basis for evaluating the quality of XBRL files.
Published on March 10, 2017

AICAP Comment Letter to SEC Investment Company Modernization

Article AICPA Comment Letter to SEC on proposed rule for Investment Company Modernization
Published on August 11, 2015

Background of XBRL

Article In 1998, Charlie Hoffman, a single CPA who worked for a small CPA firm in Washington state, had the idea of XBRL as a way of totally transforming business reporting. (Read XBRL: It’s Unstoppable – A Conversation with the Father of the Digit
Published on June 02, 2015

XBRL Costs Study

Article Research Shows XBRL Filing Costs Lower than Expected  EXtensible Business Reporting Language (XBRL) is a global data standard used for reporting business information in a computer-readable format. The standardization of busin
Published on January 16, 2015

XBRL Costs for Small Companies

Article AICPA and XBRL US conducted a joint study to understand the costs to comply with the SEC XBRL mandate for small companies.  The research shows that the costs were lower than expected.
Published on January 16, 2015

AICPA Response to Treasury Bureau of Fiscal Service

Article AICPA supports the application of data standards, and the requirements of the DATA Act to bring benefits of data standards to government reporting. The AICPA believes that XBRL is the only available data standard to adequately meet the requirements of the DATA Act.
Published on November 24, 2014

AICPA response to Treasury Office of Inspector General

Article AICPA response to Request for information on a comprehensive framework of audit procedures to support compliance with auditing and reporting responsibilities under the Digital Accountability and Transparency Act of 2014 (DATA Act)
Published on November 24, 2014

XBRL Update

Article GET your sign values correct in XBRL files published by XBRL Assurance Task Force
Published on December 31, 2013

SOP 13-2 Performing Agreed-Upon Procedures Engagements That Address the Completeness, Mapping, Consistency, or Structure...

Professional Standards SOP 13-2 was developed by the AICPA XBRL Assurance Task Force and issued by the Auditing Standards Board to provide guidance on performing agreed-upon procedures engagements that address XBRL-Formatted Information.
Published on September 16, 2013

Page  1 2
Showing results 1 – 15 of 21
Show Results per page

Related AICPA Products

© 2017 Association of International Certified Professional Accountants. All rights reserved.