XBRL -- What the heck is that?
If you are like me, you probably haven’t heard of XBRL. If you haven’t, and you have the least bit of responsibility for Security and Exchange Commission (SEC) reporting requirements or if you are interested in how regulatory agencies can avoid future Madoff-like (story) events, you should take a minute to get up to speed on what XBRL can do.
XBRL is a version of XML for financial reporting. The value of XBRL is that by creating standardized tags for data elements (ie, net income, cash, interest, etc.), companies will not only have to conform their financial statement line items to the defined tags, but in doing so it will make it much easier for investors and regulators alike to analyze and compare the financials of various companies.
The IBM Data Governance Council has announced recently an initiative to develop a new Extensible Business Reporting Language (XBRL) taxonomy to describe risk and market losses.
read more
XBRL is a version of XML for financial reporting. The value of XBRL is that by creating standardized tags for data elements (ie, net income, cash, interest, etc.), companies will not only have to conform their financial statement line items to the defined tags, but in doing so it will make it much easier for investors and regulators alike to analyze and compare the financials of various companies.
The IBM Data Governance Council has announced recently an initiative to develop a new Extensible Business Reporting Language (XBRL) taxonomy to describe risk and market losses.
read more
According to cnet news, “the council is a group of 50 global companies including American Express, Bank of America and Citibank, believes a XBRL risk taxonomy could provide a more thorough picture of risk that is incurred in the overall economy – thereby preventing the sort of market meltdown that occurred this year because of the lack of understanding of the risk in subprime mortgage derivatives”. Article
The SEC has approved the final XBRL rule so beginning June 2009, $5 billion Market Cap companies will have to start reporting using XBRL. The next 1,800 in market size will be required to do so by the end of 2009, and everyone else in 2010. Today, the SEC accepts financial documents in either HTML or plain text.
The IBM Data Governance Council is working to create consistency in the way companies disclose operational, market and credit risk. What’s convenient about XBRL to help achieve this end is that it is becoming widely adopted, so there is a lot of knowledge about how to prepare reports using the language. With the SEC approving the XBRL rule, we will have a global standard, or close to it, for financial reporting.
Not only will XBRL be a tool for government, but it could be a tool for government watchdogs and investors alike. Although far from perfect, the XBRL regulation seems like a good start.
The SEC has approved the final XBRL rule so beginning June 2009, $5 billion Market Cap companies will have to start reporting using XBRL. The next 1,800 in market size will be required to do so by the end of 2009, and everyone else in 2010. Today, the SEC accepts financial documents in either HTML or plain text.
The IBM Data Governance Council is working to create consistency in the way companies disclose operational, market and credit risk. What’s convenient about XBRL to help achieve this end is that it is becoming widely adopted, so there is a lot of knowledge about how to prepare reports using the language. With the SEC approving the XBRL rule, we will have a global standard, or close to it, for financial reporting.
Not only will XBRL be a tool for government, but it could be a tool for government watchdogs and investors alike. Although far from perfect, the XBRL regulation seems like a good start.
Category IT Trends Compliance IT Governance
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Comments
I just wish Wall Street and the American government would actually start to regulate these firms, funds, hedges. Whats the point of rating agencies saying that Bernie MadeOffWithTheCash was triple-AAA if it was just a huge Ponzi scheme ?
Financial deregulation and the people who perform it deserve their own particular circle in hell. This includes our very own Prime Minister for doing it (whilst Chancellor) to the UK...
---* Bill
Posted by Bill At 02:54:40 PM On 12/24/2008 | - Website - |
Posted by Scott Johnsen At 09:37:46 AM On 12/25/2008 | - Website - |