XBRL (eXtensible Business Reporting Language) is an open technology standard for business reporting. XBRL has been adopted for compliance reporting by many financial regulators worldwide. However, the ultimate objective of XBRL goes beyond regulatory compliance, and exists in automating the data exchange process across the enterprise reporting chain.
XBRL taxonomy (‘data dictionary’ in more common terms) is extensible. The real power of XBRL exists in this extensible taxonomy, since special interest groups can leverage this aspect to meet their unique reporting needs.
Aspects of automating the data exchange process and extending taxonomy to meet specific reporting requirements are explored in this post.
Capturing data within the framework of an information model is the first step towards automating data exchange. The XBRL taxonomy is analogous to the information model. Once all financial data is captured within the framework of a pre-defined taxonomy, it facilitates:
XBRL adoption is the first step in automating the data exchange process. XBRL facilitates the ease of retrieval and analysis of financial data. This significantly increases the public usability data.
XBRL, as implied by the acronym, is inherently extensible. This implies that organizations can leverage the power of this extensibility to meet their internal business reporting needs. Likewise, special interest groups can extend the XBRL standard to suit specific requirements.
XBRL International, a global consortium of agencies and companies promoting the adoption of XBRL standard, has published several case studies on the use of XBRL standards beyond regulatory compliance. These case studies explain how the XBRL standard has been extended or leveraged to meet specific reporting requirements. A synopsis from two such case studies  from XBRL International is presented here.
XBRL was adopted to facilitate electronic delivery of financial data for regulatory compliance. But XBRL has been increasingly used to facilitate the paradigm of integrated reporting™, or the reporting of non financial information. A case in point is reporting on environmental sustainability. Environmental sustainability metrics are not required for compliance reporting at present. However, global initiatives by nonprofit organizations have resulted in sustainability-reporting frameworks based on the XBRL standard. These frameworks go beyond current compliance guidelines, even as organizations move towards including environmental impact of their business within their corporate performance metrics.
Organizations growing globally through mergers and acquisitions, find that they inherit different accounting programs functioning in silos. All required data for the CFO is available within the organizational units, but in disparate systems. Adopting XBRL for internal reporting in such cases ensures that financial data is available at the point of need. This can be achieved by deploying an XBRL reporting layer between existing systems. Deploying such an XBRL reporting layer has proven to be more efficient than replacing existing systems with a new, homogeneous accounting program across the organization.
In summary, XBRL has the potential to bring about a paradigm shift in electronic reporting of corporate data. XBRL will also be a key enabler of Integrated Reporting in the days to come, making it go beyond regulatory compliance.
DataTracks Service Limited (www.datatracksglobal.com) offers XBRL services in the US, UK and India. DataTracks delivery centers are ISO 9001 (Quality Management) and ISO27001 (Information Security Management) certified.
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Source :  : XBRL International http://www.xbrl.org/BPBWhitePapers