Phillip Kloeden

Abstract

A definition of XBRL will be given, followed by a brief overview of the XBRL system. A timeline of events in the brief history of XBRL will be rendered and discussed. Based on the global perspective of the XBRL movement and the establishment of an international consortium, XBRL International, international and domestic analysis will be addressed. Standardization of coding for financial reporting information is the goal of the consortium and the required coding structure will transcend national borders in order to accomplish this goal. A prototype language, created by the early users of eXtensible Markup Language (XML), in the accounting industry, was created in 1998, and became known as eXtensible Financial Reporting Markup Language (XFRML). In 2000, an accounting industry specific language, eXtensible Business Reporting Language (XBRL), was released. Currently, this coding structure is becoming part of the financial reporting process, but is off to a slow start within the United States, in 2005. Starting in 2005, software manufacturers began release of software packages which allowed for the adoption and coding of financial information in XBRL form; thus allowing for electronic submission of financial reports to the Securities and Exchange Commission (SEC), on a voluntary basis in 2005. Originally, cash-flows were a concern to the software producers regarding XBRL software development and product marketing, but an endorsement by the SEC, regarding XBRL use and adoption, led to this historic move by American corporations regarding financial reporting, in 2005. The primary focus of this paper is to look at implementation of XBRL and any known costs associated with these procedures. The benefits of XBRL adoption, implementation, and use will also be examined. A cost-benefit analysis approach will be utilized to examine XBRL, as a working concept. Due to the infancy of the XBRL movement and the lack of quantitative data, qualitative data speculating on the cost savings associated with XBRL utilization will be examined. In theory, due to the removal of data entry repetition and standardization of financial data, costs should be greatly diminished. Reducing the likelihood of errors will also constitute a cost savings. This paper sets out to establish the benefits of XBRL use and promote the adoption and implementation of the XBRL system on a global level, crossing all user barriers.

Publication Date

2006

Comments

Note: imported from RIT’s Digital Media Library running on DSpace to RIT Scholar Works in February 2014. Faculty sponsor: Karim, Khondkar

Document Type

Article

Department, Program, or Center

Accounting (SCB)

Campus

RIT – Main Campus

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