Learning about XBRL

If one were to think about it, I believe that one would quickly realize that XBRL has to exist in order to deal with the realities of financial reporting and business reporting today. XBRL will likely be part of your future, perhaps sooner than you may think and in ways you perhaps never imagined.

For example, eventually legal liability will be associated with SEC XBRL filings and the accountants responsible for creating SEC XBRL financial reports and managers reviewing them will be held more accountable for their quality. Eventually, the HTML filings will go away and only XBRL will be submitted because it is too costly to reconcile two versions of the same information.

If you believe that XBRL is important to you, you will make the investment you need to understanding and using this new financial reporting tool.  This is particularly true for accountants, internal auditors, external auditors, and other accounting professionals. 

Here are some of the best resources I know for obtaining an understanding of XBRL and how it will be used for digital financial reporting:

  • XBRL for Dummies: Provides a high level overview, the big picture, of business information exchange.  Shows the moving parts and how the parts fit together.  Don't be fooled by the name, this book is not for dummies.
  • How XBRL Works: Popular 6 minute video which explains how XBRL works.
  • Financial Report Semantics and Dynamics Theory: Helps accountants understand the semantic model of digital financial reporting in terms that a business user can grasp.
  • Digital Financial Reporting (Using an XBRL-based Model): This resource combines all the best information from this blog into one "book".  The book is available in printed form via Lulu or as downloadable PDFs for each chapter.
  • Becoming an XBRL Master Craftsman: To get the most current information follow this blog category.  I try to make sure the best information is posted to this category.  Eventually all information will be synthasized, reorganized, and make its way into the Digital Financial Reporting book.

The above information is an evolution and will be improved as better software becomes available, as more is learned, and as it becomes easier to explain digital financial reporting to business users such as accountants.  Digital financial is still very much maturing and evolving.  Harnessing this new tool is a process.

High Quality Samples/Examples

Here are collections of high quality samples and examples of XBRL which I have put together. Each set has different characteristics and utility which is explained.  Each example/sample has been validated using multiple software applications and are interoperable in quality XBRL processors:

  • Hello world example: Very, very basic example of XBRL. Contains Excel code to create XBRL instance and XBRL taxonomy.
  • Accounting Concept Arrangement Patterns (was metapatterns): The nine patterns of how Concepts are arranged within a set of [Line Items]. For example: roll up, roll forward, hierarchy, etc. Small examples. (This is what I used to refer to as metapatterns or information models. I am considering chaning this to be called "Reporting Concept Arrangement Patterns" or simply "Concept Arrangement Patterns".  The reason is, the concept arrangement relates to both financial and nonfinancial concepts.)
  • Member Arrangement Patterns (was member aggregation model): Examples of the different ways that a set of [Member]s which make up a domain of an [Axis] can be represented. (This was called member aggregation patterns.)
  • Report Component Arrangement Patterns (was flow model): Examples of the different ways that the relationship between report components can be expressed.
  • Business use cases: A set of about 30 specific business use cases showing how to model the specific information in XBRL.
  • Comprehensive example: Combines the 30 specific business use cases into one larger report allowing for testing the interaction between the specific business use cases. This is a very sophisticated example, but simple enough, reducing the amount of noise you have to endure to get to meaningful information about how to get XBRL to really work to meet your needs.
  • SEC/US GAAP Reporting templates: A set of approximately 75 high-quality SEC/US GAAP specific reporting templates.  Sound modeling, includes business rules.
  • Reference implementation (SEC filing): The reference implementation of an SEC XBRL financial filing builds on the accounting concept arrangement patterns, member arrangement patterns, report component arrangement patterns, business use cases, comprehensive example, and reporting templates.  It is like the comprehensive example in that the reference implementation puts all business use cases together to be sure they interact with one another correctly. The reference implementation endeavours to create a digital financial report which adheres to the filing rules specified by the SEC within the Edgar Filer Manual (EFM).  It uses the 2013 US GAAP taxonomy.
  • Comparison: This includes the reference implementation and two copies of the reference implementation.  This is very good for testing comparibility between SEC filings. (ABC Company, XYZ Company, and QQQ Company)
  • Reference implementation (IFRS): (Work in progress) This is a reference implementation of an IFRS-based financial report.
  • SEC XBRL financial filings: Thousands of SEC XBRL financial filings provided by XBRL Cloud on their EDGAR Dashboard.  Tool which allows business users to browse many, many SEC XBRL financial filings.

Prototypes

Over the years I have put together a number of prototypes to help me understand digital financial reporting and to explain it to others.  Many of these are older prototypes, but helpful none-the-less.  Here are a number of prototypes which can help you understand XBRL, understand how XBRL is going to change how financial reports are created in the future, and otherwise wrap your head around XBRL and digital financial reporting:

  • Basic comparison, SEC XBRL filings: What amounts to three basic examples, great for testing analysis software and understanding what makes information comparable and what gets in the way of comparability.
  • Comparison example: This is three comprehensive examples which can be used to test the analytical capabilities of software.
  • Comparison of SEC XBRL filings: A set of three SEC XBRL filings which are useful in understanding issues related to comparability of filings. Try these in XBRL viewer software.
  • XBRL Techniques and Trends: This prototype is explained on this blog post and this blog post. Basically, imagine the AICPA's Accounting Trends and Techniques not for 600 companies, rather for ever SEC filer, querying how things are reported by industry, by type of entity, etc.
  • Exemplars: Exemplars are specific examples.  Click on the "Show Exemplars" link in the left side pane of this prototype to go see a number of exemplars. Exemplars are explained in this blog post.
  • SEC Financial Filing Recap/Examination Utility: This working prototype helps you see the types of validation or verification reports one might use to help ensure their SEC XBRL financial filings where created correctly.  This blog post talks about the characteristics of a quality filing. These reports are intended to help you meet those characteristics.
  • Web service prototype: Web service of EDGAR information
  • Web Service of US GAAP Taxonomy Information: It is hard to demonstrate a web service which is intended for one computer application to communicate with another, but this prototype tries to show that.  You can get HTML renderings and XML information from this sample web service. Click on the XML link and then "view source" of the web page returned.  What you will see is an easy to read (both humans and computers) of information from the US GAAP Taxonomy. Here are a few more ways to get to this information.
  • Dow Jones Industrials: This is an automatically generated summary of total assets and net cash flows of the 30 companies which make up the Dow Jones Industrials. Information comes from the SEC XBRL information files.
  • Core Financial Integrity Analyzer: Excel prototype which checks core financial integrity of an SEC XBRL financial filing. This has lots of nice sample code.
  • Excel-based Taxonomy Explorer: Excel-based taxonomy explorer.  This has lots of nice sample code.

Peeking into the Future

XBRL is a new medium. There will be an evolution from the old medium of paper or electronic representations of paper such as HTML or PDF to this new medium.  That transition will take some time, but it will occur. This section helps you peek into that future.

  • Financial report today: This is what a financial report looks like today. It is two dimensional (i.e. flat, like paper), it is fixed (i.e. it cannot be reconfigured like a pivot table), it is created using tools which know nothing about financial reports (i.e. like Microsoft Word), it is unstructured.
  • Prototype of financial report of the future: (You have to use your imagination here because I am not a programmer and therefore cannot create this myself.) This is a one rendering of one XBRL instance and supporting XBRL taxonomy. If you look close, you can see the pieces.  The pieces are structured (i.e. not unstructured).  Because the pieces are structured, computers can understand the pieces.  Because the pieces are from a global standard, the pieces are well understood and software applications support and understand the pieces. Computer applications use the pieces, reorganizing them as desired by users, the business report is flexible. If you really look at the one HTML rendering, you can see how this might be possible. Or, try this Excel prototype application. Again, I am not a programmer, you have to use your imagination.  But these flexible applications which improve upon the paper-based financial report are on the way. Read through this information and you will realize that this is true. These ideas will be applied not just to financial reporting, but rather to business reporting in general.  I call this the "intelligent business document". It leverages the multidimensional model, the XBRL standard, the Internet and the Web. To help see that vision more clearly, read XBRL for Dummies.
  • First Generation Digital Financial Reporting Applications: There are two digital financial reporting applications I can point to.  The first is the Firefox XBRL Viewer Add on.  While that application does not format information very well, it does provide the ability to pivot information.  The second is the SEC XBRL Interactive Data viewer.  That tool formats information pretty well, but it is not interactive, you cannot pivot the information.  Imagine a tool which does both pivoting and formats information as you would expect.
  • Commercially available digital financial report viewing application: This is the best commercially available digital financial reporting tool which I am aware of at this point and which I can freely link to in order to provide an example of such software. This digital financial report viewer was created by XBRL Cloud. It shows a model/reference prototype of an SEC XBRL financial report which I have created.

Are you ready for the future of financial reporting? Here is a path into your future, Mastering XBRL. The path is not that easy today, but it will get easier. Being an early adopter has its advantages.

What is XBRL?

Getting your head around XBRL can be challenging.  Much of this challenge is similar to trying to teach someone about algebra or calculus if they do not understand how to count or do not understand the mathematical operators of addition, subtraction, multiplication, and division.

In summary, XBRL is:

  • A freely available, market driven, open, global standard technical syntax for expressing and exchanging business information.
  • An XML language.
  • A global consortium of more than 600 members
  • A means of modeling business information in a form understandable by computer applications

XBRL is not:

  • XBRL is NOT a standard chart of accounts.  In fact, it is the opposite because XBRL is extensible.
  • XBRL does NOT require companies to disclose additional information.
  • XBRL is NOT just about financial or regulatory reporting.

Many people tend to try and dumb down the definition of what XBRL is in order to explain it.  This occurs for two reasons.  First, they think it makes it easier to explain XBRL, but the common result is a poor communication of what XBRL truly is.  Second, the person trying to explain XBRL may not truly understand XBRL themselves.

In my view, the best definition of XBRL can be found on Wikipedia.  That definition is:

XBRL (eXtensible Business Reporting Language) is an open standard which supports information modeling and the expression of semantic meaning commonly required in business reporting.

A key term here is the "information modeling".  Many people associate the phrase "automating data exchange" with XBRL which is a mistake.  Also, many people erroneously think of the term "data" when trying to get their heads around XBRL.  Further, the name "XBRL" tends to get in the way of understanding what XBRL is, rather than helping one understand it.  Left out of this definition though is the notion that XBRL is a formal agreed upon way to model information and the notion that the information model is readable by both humans and by computers.

Business reporting is only one type of information exchange, it is not the only type of information exchange.  Further, the information exchange is a by product of what XBRL really does which is define the information model.  That information model is what makes the information exchange possible.  But the information model also makes a lot of other things possible!

Business people don't generally grasp the true meaning of terms such as "syntax", "semantics", "meta data", "business rules" or the difference between "structured" and "unstructured" information.  Yet, these terms are critical to the understanding of what XBRL really is and why it is important.

Technical people tend to think that XBRL is just another form of XML.  That is a big mistake.  Technical people tend to confuse the term "extensible" and think that the way XML uses the word and the way XBRL uses the word is the same.  It is not.

Notice that no where in the Wikipedia definition of XBRL does the word "exchange" or the term "financial reporting" exist.  These are mis-perceptions people have.  XBRL enables exchange; that is only ONE of the things it does.  More importantly is the understanding that XBRL enables INFORMATION exchange, not just DATA exchange.  Sure, you can use XBRL to exchange data.

Deep Dive

Like the details? Here you go. These are in order by date that I was working on these things. This is an accumulation miscellaneous stuff used to figure out the best approaches to using XBRL in general and for SEC XBRL filings:

There are two other summaries of earlier information (focus on XBRL syntax). The FRUX book and XBRL for Dummies.

Technical

And for the REALLY technical people, these are useful links to hundreds of specific examples from the conformance suites provided by XBRL International:

 

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