XBRL delivers taxonomy for electronic accounts
At a press conference  in New York last week, XBRL U.S. president Mark Bolgiano symbolically handed SEC Chairman Christopher Cox a memory stick containing the taxonomy, which is made up of thousands of XML tags that define the classifications used in U.S. accounts.
"This is a great step toward making SEC reporting easier for registrants and easier to understand for every investor," said Cox, who is a big fan of interactive financial data. Common XBRL tags for accounts data means companies can file information straight into the SEC's EDGAR online database, and investors and analysts can extract data into spreadsheets and analysis programs to compare data from different companies.
For the past two years, the SEC has been running a pilot scheme to let listed companies file their financial reports in XBRL. Several dozen companies, including Microsoft, Dow Chemical, Lehman Brothers, and Xerox have taken part in the pilot. Their combined market capitalization is equivalent to $2 trillion, but some of their filings have had to rely on home-made tags.
The official XBRL U.S. standard should now cater for any filer and impose the uniformity that analysts need.
The completed schema will first undergo a review for compliance with U.S. GAAP by the Financial Accounting Foundation and go out to analysts, accountants, and financial software companies for their comment.
An equivalent UK GAAP taxonomy was completed in January. Referring to the different XBRL taxonomies, Paul Booth of the Institute of Chartered Accountants in England and Wales's IT Faculty stated, "It's because there are different sets of accounting standards. The point is that XBRL is extensible. As financial reporting concepts develop and converge, the XBRL standard can be adapted to cater for whatever the standards require. That's its strength."
Written by John Stokdyk for our sister site, AccountingWEB.co.uk