XBRL Formulas

The many specifications which constitues what is collectively commonly referred to as XBRL Formula are used to create business rules which express different types of relations between information.

This page summarizes information to help you get started using XBRL Formulas to express business rules.  Right now, the focus is the semi-technical business user who wants to roll up their sleeves and figure this out. As time allows, the information will evolve to become easier and easier to less technical business users to make use of.

Here are some resources for understanding XBRL Formulas:

  • XBRL International XBRL Formula Specifications: These are the official specification documents. These tend to be quite technical in nature, but  they are the definitive reference.
  • XBRL International Diagram of the Relations Between XBRL Formula Specifications: This organized the XBRL Formula specifications and helps you see the relations between the different specifications.
  • XBRL Formulas Conformance Suite: This ZIP file contains a test suite which software vendors use to test their implementation of XBRL Formula.  These tests also are great examples of how to use XBRL Formula.
  • Hitchhiker's Guide to Business Rules using XBRL Formulas: (Coming soon) This takes the technical specifications and organizes the information so that it is more user oriented.  It paints the big picture and helps you get started creating business rules.
  • Herm Fischer's Tutorial on XBRL Formulas: This presentation is for PWD3 which is not that much different than PWD4 or the final version.  This is rather technical, but it is the best that exists at the moment.
  • Annotated Formula Samples: [Draft of 2008-03-27, CR4] Contains annotated sample XBRL Formulas, will help you walk through the the formulas.

What are Business Rules?

The ability to express business rules is probably the single most powerful feature of XBRL (other than the fundamental ability to express business information in a standard structured format).

The term "business rules" can be defined in many ways. A good resource for understanding exactly what business rules are is the Business Rules Group.  You can see this URL for more information.

There really is no standard definition for what a business rule is.  Here are some definitions which others use to help you get a sense for what business rules are:

  • A formal statement that defines or constrains some aspect of a business that is intended to assert business structure, or to control or otherwise influence the behavior of the business
  • A way of expressing the business meaning (semantics) of a set of information
  • A formal and implementable expression of some business user requirement
  • The practices, processes, and policies by which an organization conducts its business

Business rules exist in the form of relationships between pieces of business information. Some examples can help you better understand exactly what they are:

  • Assertions: For example asserting that the balance sheet balances or Assets = Liabilities + Equity.
  • Computations: For example, calculating things, such as Total Property, Plant and Equipment = Land + Buildings + Fixtures + IT Equipment + Other Property, Plant, and Equipment.
  • Process-oriented rules:  For example, the disclosure checklist commonly used to create a financial statement which might have a rule, "If Property, Plant, and Equipment exists, then a Property, Plant and Equipment policies and disclosures must exist."
  • Regulations: Another type of rule is a regulation which must be complied with, such as "The following is the set of ten things that must be reported if you have Property, Plant and Equipment on your balance sheet: deprecation method by class, useful life by class, amount under capital leases by class . . ." and so on.  Many people refer to these as reportability rules.
  • Instructions or documentation: Rules can document relations or provide instructions, such as "Cash flow types must be either operating, financing, or investing."

Today, it is quite common that business rules are application specific.  But what if business rules were not locked into a specific software application? What if these rules could be exchanged along with the information.  That is the power of business rules.  What the exchange of business rules allows is the effecient and effective automation of information exchange across business systems.