Liv A. Watson
XBRL: Enhancing Financial Reporting Transparency
Use these steps to help your clients convert data into XBRL.
July 6, 2006
by Liv A. Watson, VP of Global Strategy
In last month’s column, I encouraged CPAs to help their clients format their financial reports in “Interactive Data” format and join the many companies participating in the SEC’s Voluntary Filing Program.
CPAs have unfortunately been dragging their feet in providing their clients with solutions for tagging their financials in XBRL because most accountants think that XBRL is only about a new complicated technology. For those of you who still view XBRL as simply technology, I have one question: Do you look at HTML as technology or do you look at it as a must-have solution for communicating financial and business reporting information to the ever-growing networked world?
Today, most accountants probably do not even think about HTML as the underlying solution that enables them to communicate to the right stakeholders. Fact: Getting the right information to the right stakeholders at the right time is the common Internet standard called HTML. It allows you to control how the stakeholders view information when they launch their Internet browser. However, HTML has its limitations: the data is only useful for human consumption and interpretation. Computers cannot process or understand the data in HTML format. Computers can understand data once it is tagged to XBRL taxonomies.
Last month’s column explained why CPAs should take the lead and encourage their public company clients to tag their financial statements to XBRL Taxonomies and participate in SEC's XBRL Voluntary Filing Program.
This month, we’ll explore the “means to do it” with different solutions that are out in the marketplace for getting your clients company data converted into XBRL.
Other software vendors like Adobe, EDGAR Online, Microsoft, Oracle, Fujitsu and Hitachi, DecisionSoft, DynAccSys, Rivet Software, Semansys and UBmatrix also provide XBRL Solutions and services. For more information visit the XBRL Web site.
An emerging worldwide standard for the publishing, exchange, and analysis of financial reports and data, XBRL makes it easier to prepare and publish financial documents. The idea is to enter information once, and then automatically convert it to various formats. The information can also be reliably extracted and analyzed across companies.
Still not convinced that you too can provide a service to your client that makes financial reporting in XBRL as uncomplicated as opening an HTML document?
Remember that there are currently over 20 companies taking part in the SEC Voluntary Filing Program reporting in XBRL in the U.S. and hundreds of thousands of companies around the world accomplishing the same. Each of those companies has and accountant or an accounting firm helping them. What’s holding you back? Take the next step and see simplicity at its best.
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Liv Watson is an accountant and Vice President of Global Strategy for Norwalk, Connecticut-based EDGAR Online Inc. (NASDAQ: EDGR) — a provider of global business and financial information. Questions? Contact Liv.