Several years into the 21st century’s Internet information revolution, consolidating business information for financial reporting or analysis is still based on the same manual processes used for the last quarter of a century. The prerequisite for using business information is still preparing it for use through low-value, manual tasks searching for information and then cutting, pasting and re-keying it into a single software file for reporting or analysis. These manual procedures will never be efficient; they will always be slow, labour intensive, costly and highly error prone.
XBRL eXtensible Business Reporting Language and the Web services information transportation and security standards offer an alternative to the old-fashioned business-reporting process: They help companies automate information gathering and consolidation. By enabling direct communication among disparate business-information systems and software, XBRL Web services eliminates the need for manual preparation tasks, leaving more time for information use, especially analysis.
XBRL leverages Web services Internet technology and existing systems and software to improve business-data exchange within companies and between companies and their stakeholders, making information:
Any software is capable of understanding and processing XBRL Web services enabled information because it provides software- and platform-neutral definitions and contexts to describe financial data that apply across companies, and even industries and national borders. As a result, business becomes more efficient because information exchange is more efficient for application of business rules on internal, company information, and for business decision makers, whether they are executives, fund managers, financial analysts, auditors, regulators, investors or creditors.
XBRL provides the basis for software developers to anticipate the format of information and build functionality into their tools so information consumers can select the precise information they want from a report, right from their desktop analytical software. NASDAQ, Microsoft and PwC collaborated on a demonstration to illustrate how XBRL enables information consumers to select data they want from company reports and have it delivered in seconds along with associated footnotes right into an analytical spreadsheet. (See www.nasdaq.com/xbrl.)
With XBRL Web services, business information consumers are better assured that data used in a report or analysis accurately reflects the information as offered by the source. This is because, in an XBRL Web services environment, information is accessed through a user’s own desktop software directly from the publishing source. This gives users greater confidence that information has been unchanged by easy-to-make, hard-to-spot manual errors, providing more confidence in their analysis and decision making.
By enabling automation of business-information exchange, XBRL Web services creates a “hands off” environment in which decision makers can access more information in less time at lower cost. With little or no delay between publication and use, there is more time for analysis, which means better, more informed business decisions.