XBRL is an abbreviation which implies «extensible Business Reporting Language». The xbrl meaning is a special software model invented for optimization of the financial data transaction.
The interesting peculiarity is that this product performs as a practical implementation of Extensible Markup Language, — a specific digital language operated for the structuring database.
So, since you got the answer to the question «what is the meaning of xbrl?» It’s high time to answer «what is xbrl used for? »
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Understanding extensible Business Reporting Language
Operating with typical financial data is very complicated. E.g. if you are to get such information presented on a website as a table file to conduct analysis, you will face the necessity to copy/paste or even manually type the data you need.
But, if the data is presented in the way the extensible Business Reporting Language (XBRL) determines, you will be able to transfer this information from the website to a special XBRL compatible table program.
Financial reporting in the format of extensive business reporting language XBRL is not mandatory and is used arbitrarily by companies. But due to its wide-spreading, there is a supposition that pretty soon it will become obligatory.
The unification of tags and the standards of this language allows easy transferring and compiling into the acceptable structure of financial data from the country, that has implemented accounting standards like U.S. GAAP to a country which standards dramatically deviate.
iXBRL is an update with the special inline function marked «i», that conducts embedding of XBRL in HTML documents.
XBRL filing services work as a product of American Institute of Certified Public Accountants (AICPA), that developed the language in 1998, setting up a version 1.0
Later, in 2003, there was formalized the version 2.1
This latest version has remained without serious changes for all these years. However, a scope of XBRL modules has been developed for extension of functionality.
What does XBRL do?
XBRL levels up the financial reporting efficiency and simplifies the analysis of it.
Due to using unique tags which are associated with precise reported facts the system:
- Allows being sure that the information of published reports is analyzable and comprehendible.
- Those who deal with the reports to check them for their correspondence to business and logical rules to avoid mistakes
- Using the data in the way one likes and needs, operating different languages, alternative currencies, etc.
- To have no doubts that the whole data they are dealing with is used correspondingly to the unified definitions and unified categories.
Here is a list of potential functions one can do via the system with the business information of all kinds:
- Preparation of reports
- Data validation
- Reports publication
- Data exchange
- Comprehension and analysis.
Besides the exchanging of financial reports’ data (financial statements, risks, and performance reports) XBRL (https://project-edgar.com/services/xbrl-information/) allows tagging of transactions that also can be processed into independent XBRL reports.
Who uses it?
XBRL is an international consortium which comprises more than 600 member organizations, from private and public sectors. The standard has such a multi-functionality that use of xbrl comes in handy for:
Security and financial regulators, business registrations, tax regulators, authorities in statistical and monetary policy,
Companies and enterprises
Analysts and Investors
What are some of the most important features of XBRL?
The advantages are:
— Allows drawing up taxonomies — authoritative definitions that seize the sense comprised in all the reporting terms and relationships between them.
Such taxonomies are set by regulators, government structures, and other stakeholders that need to designate data to be reported upon.
— Allows setting rules that define and restrict what can be reported.
— Prevents sending and acceptance of low-quality information
— Empathizes questionable data
— Allows operative improvisation, commenting, explanation
— Creates a variety of value-added information like ratios or aggregations
— Translation of concept definitions into as many languages as necessary. Translations can also be adjusted by third parties. You can prepare reports in one language and then display them in another language without any additional efforts.
— Simultaneous displaying of reports to different communities in different languages
— XBRL is supported by many vendors, so, a great variety of stakeholders can easily work with the standard.