The reporting entities which are creating all those SEC XBRL financial filings tend to lament that all the benefit goes to those using the structured information and that they have to do all the work. OK, and so people would likely point out that the information is not even that useful because the quality is not good enough.
Personally, I have never held that belief and I am beginning to be able to SHOW that there is not only benefit to reporting entities creating financial reports whether those reporting entities have to report to the SEC using the XBRL format or not.
While I have not been able to connect all these pieces as good as I would want, I am rapidly getting where I want to be. But here is some stuff I put together as an interim step which show, I believe, the advantages information structured using XBRL provides.
First, take a look at this document: Financial Reporting Best Practices. Take a look at that and the first thing that you might notice is that you don't really see anything necessarily related to XBRL. What I mean is that anyone creating a financial report would find that information useful. If you are an SEC XBRL filer you might find it even more useful; but even if you don't, it helps external reporting managers in their task of creating a financial report. I am not talking about only public companies. I am talking about private companies also.
You say no; I already have resources such as this or I already understand how to report a reconciliation of the statutory rate and effective tax rate. Sure you do. You have books. Well, three things about the books: (a) as soon as they are printed they are obsolete, (b) putting the books together is time consuming and therefore expensive, (c) if the information is in the form of a book a computer cannot really read the information and re-purpose the information in other formats.
Now, I really cannot show the true benefit here by putting this information into a PDF. To get the full experience, you need to have a subscription to a web service or something which enables you to interact with the information more effectively. Me, I use the XBRL Cloud Edgar Report Information Web Service. I would encourage you to get a subscription and experiment with it.
I can emulate how interacting with the information would work. Here is another application of XBRL Cloud which they call "The Evidence Package". Click here or on the image below to go to that application.
Click on any of the report elements (the labels on the left) and you will see documentation about the line item, references to the Accounting Standards Codification, and other helpful information.
Think about what is going on here. You can look at a specific piece of a financial report. You can add information to those about what the report component is disclosing, you can reorganize the information and not look at the information by who filed it, but rather by what information is being disclosed.
Never, never, never before was it possible to look at information about what is in financial reports in this manner. All of this is possible because the financial information is structured, in this case in XBRL. Before financial reports were just one big blob of which a computer could do nothing with. Now because the information is structured; you can restructure it and use it in lots of new and interesting ways.
What I find even more interesting is that you can use all those SEC XBRL financial filings TODAY! Quality issues are less critical to accountants researching trying to figure out how to create a disclosure. Why? Simply ignore the poor quality report components and use the good ones.
This information is also useful to SEC XBRL financial filers. Why? Great way to see what other filers are doing and how what you create stacks up.
If you have not seen this blog post yet, go back and read it. This helps you see where all this is going and see how easy it is to get at this information. I created my own software application and I am not even a programmer!
All I do is access URLs on the internet. Here is one of those URLs:
Again, you need a subscription to use these, but it represents one piece of a financial report. My software application just interacts with URLs like that which have all that SEC XBRL financial information broken up into useful report components.