Why XBRL could be king
It's quite fitting that international news, information and technology group Reuters became Europe's first listed company to release financial results on the net using the XBRL standard.
Reuters’ reputation stands on its ability to communicate and the Extensible Business Reporting Language standard it has employed this week to publish accounts online is among the most significant of developments in promoting transparency in financial information.
Put simply, XBRL permits the automatic exchange – and, crucially the reliable extraction – of financial information across all software formats and technologies, including the internet.
Financially the internet and its attendant developments have earned themselves a bruised reputation. But XBRL should not be tarred with the same brush as the dotcom bubble. There true financial madness reigned, here financial transparency could be king.
Reuters’ first steps mark the start of a programme of testing of XBRL over the coming months, steps that will lead to publication of a UK version.
In the eyes of the ICAEW, this will enable general use of XBRL by companies and ‘far more efficient financial communications’.
The company law review has also came down firmly in support of online publication. ‘Website publication has unprecedented power to achieve the widespread dissemination of information instantaneously and at minimal cost,’ it concluded. XBRL underpins that aim. It is a technology all accountants need to familiarise themselves with over the coming months.