Learning about XBRL and XBRL-based Digital Financial Reporting

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:

  • Computer Empathy: To grasp digital financial reporting you have to shift your thinking away from past paradigms and think in some new ways.  This document helps you make this shift.
  • 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.
  • Conceptual Overview of an XBRL-based, Structured Digital Financial Report: Provides the big picture and enough details to help you understand how XBRL-based digital financial reporting works.
  • Intelligent XBRL-based Digital Financial Reporting: This 700+ page tome provides all the details you need to understand pretty much any aspect of digital financial reporting.
  • 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 Intelligent XBRL-based Digital Financial Reporting book (see above).

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:

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:

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, the modern finance platform.

  • Financial report today: (2010) 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: (2010) (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. 
  • 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 dashboard of XBRL-based public company financial reports: Commercially available dashboard that lets you view US GAAP and IFRS based reports submitted to the U.S. Securities and Exchange Commission.
  • 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.
  • Pesseract: Working proof of concept of an expert system for creating financial reports. You can download and experiment with the software for free.  Requires Microsoft Windows 7.0 or higher.  This is a work in progress so check back periodically for updated software.

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.

Understanding what XBRL is and what XBRL is not?

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 both computer applications and humans.
  • A knowledge media.

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". 

Business professionals 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. This is why the information in the document Computer Empathy is helpful.

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. For a good explanation of what XBRL really is, see The XBRL Book: Simple, Technical, Precise.

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: