Washington, D.C. (June 16, 2016) – Recent developments point to the growing usefulness and reliability of eXtensible Business Reporting Language (XBRL).
XBRL is a technology standard to electronically communicate business and financial data. The XBRL standard has been implemented around the world for the reporting of company financials, government expenditures and corporate actions, among other reporting domains.
The U.S. Securities and Exchange Commission (SEC) on June 13 issued an order under the Securities Exchange Act to allow companies to file structured financial statement data using Inline XBRL on a voluntary basis through March 2020. Inline XBRL is a format that allows filers to embed XBRL data directly into a HyperText Markup Language (HTML) document which eliminates the requirement to tag data in a separate instance document. In its June 13 announcement, the Commission noted that the format could decrease filing preparation costs, improve the quality of structured data, and, by improving data quality, increase the use of XBRL data by investors and other market participants.
Meanwhile, the XBRL US Data Quality Committee (DQC) has reported a significant improvement in year-over-year filing quality for XBRL submissions to the SEC. The DQC analyzed the results of running its first set of validation rules which showed that filers reduced the number of errors in their filings for the data covered by those rules by 64 percent in the first quarter of 2016 as compared with the first quarter of 2015.
“Filing financial statements using Inline XBRL can provide efficiencies and a more effective filing preparation and review process which can help to improve the quality of the filings,” said AICPA President and CEO Barry C. Melancon, CPA, CGMA, and a member of the XBRL US board of directors. “Further, the decline in the number of errors during the first quarter is both a product of the DQC’s first set of rules and a sign of the improvement in the accuracy of tagging financial data. Over time, we fully expect to see this structured data become increasingly useful for investors, analysts and others who use SEC filings,” he added.
The DQC provides technical implementation support to the XBRL US Center for Data Quality, which was formed by XBRL US and an alliance of five companies. The American Institute of CPAs (AICPA) is a member of the Center and is represented on the Committee.