Tuesday, January 25, 2022

Big names back new XML-based financial standard

Some of the world’s top financial institutions have formed a consortium to promote a new XML-based standard for exchanging financial data over the Internet.

The group, the XBRL Project Committee, expects to launch the standard by July 1, the American Institute of Certified Public Accountants (AICPA) has announced.

The standard, called Extensible Business Reporting Language (XBRL), is also backed by big-name financial service companies such as Standard & Poor’s, Arthur Andersen LLP, Deloitte & Touche LLP, Morgan Stanley Dean Witter, Ernst & Young LLP and PricewaterhouseCoopers.

In addition, some of the biggest names in the computer industry have lined up behind XBRL, including IBM, SAP AG, Microsoft Corp. and Oracle Corp. Financial reporting companies such as EDGAR Online Inc. and Reuters Group LP, as well as the International Accounting Standards Committee, are also backing the proposed standard.

The standard will be released in stages. The first release, scheduled for July, will cover specifications for publishing companies’ financial statements in XBRL, said Mike Willis, chairman of the XBRL steering committee and a partner at PricewaterhouseCoopers. Other specifications, which will cover additional types of business reports – such as regulatory statements including Securities and Exchange Commission EDGAR files, tax filings and business event reports such as press releases – will be issued within the next 18 to 24 months, he said.

Willis said that because these specifications are simply electronic dictionaries for the XML standards that are already used in a great number of software applications, they will be simple to install and use.

“We have vendors such as SAP who are already working to integrate XBRL directly into their software, so when their customers want to run their financial statements, XBRL is an option,” said Christy Reichhelm, an enterprise resource planning industry manager at Microsoft and co-chair of the public relations and communications working group for XBRL.

“This will be a new feature in these software packages, so some type of software upgrade will be gone through,” she added. “But it would be minor.”

XBRL will be a free specification that uses accepted financial reporting standards and practices to exchange financial statements across all software and technologies, including the Internet, the AICPA said.

“XBRL . . . greatly benefits all users of financial information,” said Robert Elliot, chairman of the AICPA. “XBRL solves two significant problems for users and preparers of financial statements by providing efficient preparation and reliable extraction of financial data across all technology formats, including the Internet.”

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