Inside XBRL

Extensible business reporting language, or XBRL, is a language standard used to communicate business and financial information electronically. Like other standards — red traffic lights meaning "stop" or electrical receptacles that work with any manufacturer's plug — XBRL isn't a proprietary format, but a universally agreed upon way of doing things, intended to benefit all users. In the case of XBRL, adoption of the standard is intended to increase the usefulness of business and financial information reported to government agencies. XBRL will make flat-text documents now filed with the government into collections of usable data elements. Ultimately, the standard will increase efficiency, reduce costs and improve productivity among all users. As described by XBRL International, a not-for-profit consortium of about 550 companies and agencies worldwide that support the language, XBRL provides a computer-readable identifying tag for each piece of financial data. The tag contains its own definition of the data contained in it as well as the actual data. An example of a typical tag name would be "Deposits Paid for Securities Borrowed at Carrying Value," which is one of hundreds of data tag names that correspond to data fields commonly used by broker-dealers. These data fields are found within XBRL's broker-dealer taxonomy, or comprehensive data dictionary, which defines individual reporting concepts specific to that particular business. The insurance and banking businesses would have their own taxonomies, as would mutual funds. Because computers can recognize information embedded in an XBRL-tagged document, as well as exchange it with other computers and present it in a variety of ways, XBRL will help advisers sift and make sense of mounds of data. Whether they do it themselves or subscribe to services that will do it for them, advisers will be able to compare mutual funds more thoroughly and more easily than in the past, for instance, once SEC filings are done in the XBRL format. The days of burying important numbers in dense documents soon may be over. — Davis D. Janowski