XBRL — the data tagging language that's supposed to save the world (or at least make it easier to understand) by delivering accurate, timely, transparent and standardized financial information — is back in the news, thanks to one of those really big numbers that editors love to amplify with big, bold fonts.
Take my word for it. I'm an editor, and we absolutely love to blow things out of proportion.
The number in question is 18,000. That's the number of tagging errors that have been detected in the first 15 months in which large public U.S. companies have been required to use XBRL to tag their quarterly and annual reports.
Sounds terrible, right? I mean, 18,000 errors? How could anything go so horribly wrong?
Settle down, folks. If you read between the lines, you'll realize it's not that bad.
“That number may seem large, but Campbell Pryde, chief standards officer for XBRL U.S., notes that the filings contain more than 1.6 million tagged facts,” writes CFO.com's David McCann. “… To date, there have been fewer errors than expected. Companies are doing well at clearing up problems that cropped up in their initial filings, say both XBRL U.S. and the SEC.”
With something as big as this, there were bound to be problems. Knowing that (a) there were fewer than expected and (b) they're being fixed bodes well for XBRL's future.
Speaking of which, the XBRL International Standards Board has released “Preserve. Promote. Participate. Moving XBRL Forward,” a white paper that examines ways to “protect current investments in XBRL, encourage the adoption of XBRL worldwide (and) prepare XBRL for new opportunities in the future.” (Thanks to the folks at the Hitachi Data Interactive blog for the heads-up about the white paper.)
Which brings us to Eric Cohen.
A co-founder of XBRL itself, Cohen says there has been a “real explosion” in the use of the language, and not just because of the SEC's mandate. Significant advancements have been made in places like Japan, Korea, Singapore, China, Israel, Spain and Australia, which began XBRL-related filings on July 1. “They believe they can reduce the compliance burden by $800 million Australian dollars a year or more,” Cohen told me, “because you don't have to come up with different facts for different folks.”
And it's proving its worth beyond mere financial reporting … and Cohen says that alone should have CPAs lining up at the door.
“From the very beginning, the founders of XBRL have said that if CPAs are not actively engaged, some other parties are going to be the ones who will define the terms, and they'll become the (XBRL) experts instead of CPAs,” Cohen said. “CPAs need to understand the new Internet-based way of exchanging information — more information more often, and more potential services. … It can be tomorrow's information that CPAs will be overseeing. Knowing how to exploit that in a good sense and cope with it are going to be very important.”
Cohen offers more thoughts on XBRL in this video interview:
What are your thoughts about XBRL? Let us know, then check out these related resources.
- XBRL International
- XBRL U.S.
- SEC resources
- IASB resources
- The ABCs of XBRL: Here's what it can do
- XBRL and government: A marriage made in … Nevada?
- XBRL case studies
- Demonstrations of XBRL in action
- XBRL taxonomies
- ROI on XBRL (from the Journal of Accountancy)
- Improved Business Process through XBRL
- Benefits and uses for business