XBRL is a machine language that enhances the value of financial information.
Users of financials obtain information in an interactive manner (Bartley, et al., 2011). This universal financial reporting concept emerged in 1999, developed cooperatively by Microsoft and IBM.
Future accounting and financial software will have XBRL built-in (Choi & Meek, 2010). According to Monterio (2012), XBRL helps in report preparation; consolidation time is shortened, and assists in closing the books (Monterio, 2012)All public listed US companies are required to file their financial using XBRL effective 2011, per SEC mandate (Bizarro & Garcia, 2010). However, SEC mandated phase-in of XBRL during the 2009-11 trial period. This was an excellent idea as it helped mitigate challenges resulting from this new language (Bartley, et al., 2011).Filings done during the voluntary phase found errors even those reviewed by PriceWaterhouseCoopers LLP. Errors included missing totals, misspellings, inconsistent labels, and redundant elements. Once fully implemented, XBRL would offer transparency, timeliness, standardization, and reduced costs for reporting (Bartley, et al.
, 2011). The average cost of filing in the first year of voluntary filing program was $30,933 and $9,060 the following year (Eierle, Ojala, & Penttinen, 2014). “Successful implementation and adoption of XBRL-tagged financial reports has the potential to provide benefits in terms of efficiency, comparability, and standardization of financial reporting.” (Bartley, Chen, & Taylor, 2011).
XBRL is used globally. According to XBLR International, companies that make up 75% of global market capitalization use XBLR. Even jurisdictions within US, such as Nevada, are considering its use across state agencies (Monterio, 2012). Auditors benefit from XLBR reporting because they get accurate information faster. Thus allowing them to focus on data analysis, risk assessment, and enhanced audit trails. Benefits to accountants include improved data flow, data sharing, and “automation of many information consolidation and aggregation processes”. (Bizarro & Garcia, 2010).
Banks have reduced loan-processing time from several weeks to a couple of days (Eierle, Ojala, & Penttinen, 2014).