What is XBRL and how will it affect Australian companies?

XBRL stands for eXtensible Business Reporting Language. It is an ‘XML’ language which helps to standardise the identifying and communicating of information between businesses and on the internet.

It is an open standard and free of any licence fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. Of particular interest is the way it streamlines the processes associated with collecting and reporting financial information.

On May 14, 2008 the Securities and Exchange Commission voted unanimously to formally propose using new technology to get important information to investors faster, more reliably, and at a lower cost. At the centre of the SEC proposal is ‘interactive data’ ie XBRL to “uniquely identify individual items in a company’s financial statement so they can be easily searched on the Internet, downloaded into spreadsheets, reorganised in databases, so it can be compared and analysed by investors, analysts and journalists”.

The proposed rule would require all US companies to provide financial information using interactive data beginning next year for the largest companies, and within three years for all public companies.

XBRL is being referred to in the US as ‘Interactive Data’ and as ‘Standard Business Reporting’ in Australia and the Netherlands.

The government of Australia is supporting the adoption of XBRL to ease regulatory reporting and enhance its efficiency and accuracy. It is hoping to bring together multiple regulators across states and territories -12 agencies in all - that require financial-based reports, on a standard language (XBRL) on an electronic channel.

For XBRL to work, the content must be HTML or PDF to be searchable for XBRL tags which identify particular types of information which you can select, analyse and store.

Take a look at this www.xbrl.org/WhatIsXBRL/ for an explanation, and www.iasplus.com/pressrel/0708xbrl.pdf for an update on how it is being adopted around the world.

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