At present, there is no generally accepted common format for the data contained in financial reports. For this reason, data must often be re-entered into users' computer applications for interpretation and processing, or it must be copied and pasted from one application to another.
These and other problems are what the language for financial reporting will solve.
XBRL (extensible Business Reporting Language) is the new universal language to report and analyze financial information of companies via the Internet, this will allow the creation of personalized financial reports, at low cost and in a format compatible with most of computer applications for accounting and data analysis. It will also allow the automatic exchange of information between various software applications.
XBRL provides a common platform for the critical business that discloses processes and improves the reliability and ease of communicating financial data between users internal and external to the disclosure company.
HIS OBJECTIVES
• The initial objective of XBRL is to provide an XML-based working structure, which the global business information supply network will use to create, change and analyze reported financial information, including the filing of regulatory documents, such as, quarterly and annual financial statements, general ledger information, and audit schedule.
• XBRL seeks a benefit for the entire financial information supply network, allowing accountants, financial advisors, analysts and investors
• Obtain financial information quickly, reliably, and consistently via the Internet.
• XBRL does not replace HTML but instead improves it, in its functionality on the Internet, for which to view a web document it will not be subject to the standard part of the style sheets that are supported by Netscape or Microsoft browsers. You will not be tied to the platform either: you can see the same information from a PC or a cell phone with Internet access.
• The XBRL specification maximizes performance for all stakeholders who use it. The specification aims to benefit three categories of users: 1) Preparers of financial information 2) Intermediaries in the preparation and distribution processes 3) Users of financial information and vendors who provide software and services for one or more of these three types of users.
• Satisfy the need for a unified language in the international business community.
HOW XBRL IS BORN
In April 1998, Charles Hoffman was researching XML for electronic financial reporting. To do this, he began to develop prototypes of Financial Statements and Audit programs using XML.
The work carried out was reported to the AICPA in September 1998. The high tech task force prepared a "topic description" and proposed the creation of a Financial Statements prototype using XML. This work was presented in October 1998 to the AICPA committee, obtaining financing for the proposed project; in January 1999 the prototype was completed and presented, defining that XML was important to the accounting profession.
The AICPA requested that a business plan be prepared to investigate the business aspect of XML and in particular XML-based financial statements. The project was called code
XFRML and was completed in June 1999, and in July the AICPA committee approved funding for the project. From there, numerous companies and professional institutions came together as members of the XFRML committee.
A prototype of XFRML was created and completed in October 1999. It was used in the creation of financial statements for 10 companies.
The first meeting of the XFRML committee was held at the AICPA (New York) in October 1999, the name of the organization officially changed to the XBRL committee in April 2000.
In July 2000, the XBRL committee announced the presentation of the first specification for US companies for financial statements. Membership on the XBRL committee increased significantly.
The AICPA required that a business plan be prepared to study the feasibility of reports under XML and in particular XML as a basis for reporting Financial Statements. The project was coded under the name XFRML. This business plan was completed on June 15, 1999. This plan was the brainchild of Charles Hoffman, CPA (Independente CPA); Wayne Harding, CPA (Great Plains).
ORGANIZATIONS RELATED TO THE IMPLEMENTATION OF XBRL TECHNOLOGY
The XBRL has been developed by an international consortium of companies and organizations, sponsored by the AICPA, among which are the major companies in computer science, accounting and consulting, and institutions such as the IASB (International Accounting Standards Board), the IMA (Institute of Management Accountants), the CICA (Canadian Institute of Chartered Accountants) or the ICAEW (Institute of Chartered Accountants in England and Wales), XBRL International, whose Secretariat is located at the AICPA offices in New York. Currently, due to the strong growth experienced in its scarce two years of existence, XBRL International is articulating around the concept of jurisdiction.
HOW THE XBRL WORKS
XBRL is a computer programming add-on that tags each segment of automated business information with an identification code or marker. In most cases, the accounting software will insert the labels automatically. If your chart of accounts lacks the XBRL feature, you can add the tags using a free add-on program or customized software tagging tools.
Identification markers stay with the data when it is moved or changed. Thus, no matter how you (or, more accurately, your application software, such as a spreadsheet or word processor) format or change the information, the markers remain attached to it. Thus a number identified as a representation, for example, of profit in US dollars will always be recognized in this way. Typical labels include financial identifications such as assets, current assets, and bills of exchange (in the language of our chart of accounts in Colombia this would correspond to assets, available assets, and accounts receivable). If the XBRL program does not contain ID markers that meet the needs of your business,you can easily create your own bookmarks and add them because the program is completely modifiable.
According to the language of accounting, a series of elements or labels, with autonomous and own rules to be fulfilled at the time of processing the data in the preparation of the report is called a data dictionary, which has been built and has already been It has what is technically called a Taxonomy, which must be universally accepted, as a product of previous agreements, obviously the agreement implies that the definition of the elements is understood and accepted by all participants.
process. The taxonomy allows establishing the criteria to populate the instance document with the report's own data, therefore it constitutes the base on which the entire schema revolves. Given this circumstance, it is concluded that all software creators or marketers should be working to label their databases of
According to the XBRL taxonomy, in relation to the comprehensive basis on which the reports are to be generated, the taxonomy of
IASB (translated into Spanish on November 15, 2002, by the Ministry of Science and Technology of the University of Huelva - Spain). There is another alternative which consists of software programmers creating programs that allow data to be extracted from the databases of the accounting information systems of each organization, in accordance with the taxonomy of the jurisdiction of each country.
A jurisdiction is a community, usually national in scope, that has its own accounting standards and that assumes responsibility for the local development of the XBRL, adoption of the standard, training, and other related activities.
In order to constitute a jurisdiction, XBRL International establishes, among other requirements, that the jurisdiction be represented by an independent, non-profit organization and perceived by all members of the community as neutral and the existence of a minimum number of member companies or institutions. of the jurisdiction.
The companies will make available to the users of the information, in the world data network, "Documents of Instance" that will contain the tagged data of their databases in XML format, which are readable by machines and by human beings., with the additional guarantee that each piece of information has a clear and unique meaning for all participants.
XML is platform independent: it works with any operating system, on any computer and even on mobile phones. It is also application independent and can be integrated with almost any existing database system today. XML is simple but it has created a furor in the industry - to the point that major software manufacturers have promised to rework their products to incorporate it.
XBRL stems from the philosophy of XML that data must belong to its creators and content providers are best served in an open data format. An open data format will not only not be tied to a particular scripting language or authoring tools, but it will also offer a manufacturer-independent standard that different systems can freely communicate about.
XBRL will put financial information in context by:
• Domain / Jurisdiction. The first issue in any XBRL document is the indication of the accounting standards under which it was prepared: IAS, US-GAAP, Spain, UK, Germany, EDIFACT, etc.
• Industry. Within a given field or jurisdiction, there may be industry-specific extensions that provide context for users. For example, in France, a company may be listed in one or more of the 101 clearly described industrial sectors
• Document. XBRL is focused on financial reporting at the moment, but there will be more sample documents in the future:
- Financial statements
- Ledger
- Reports on journal entries
- Credit reports
- Risk reports
- To complement standards
- To supplement tax returns
- Insurance forms
- Writings to the Government
- Commercial information (Balanced scorecard, benchmarking, etc.)
This last point captures the full potential of XBRL: going beyond mere communication
financial and covering all types of business communication.
For example, a customer can submit a financial report to their bank using their accounting software. In this case, the program can automatically create a file in a format that the bank can easily import from its computer system. Traditionally, this information has been sent in Adobe Acrobat format, with Microsoft Word files or as text files. However, these formats that may be suitable for a human reader do not facilitate the extraction of information into computer programs. Another option might be to work with the bank's accounting department to use a certain format (for example, comma-delimited text files). Of course, if the bank decides later to change the file format to accommodate other clients,then the client would have to make the appropriate changes to the financial report generator. XBRL offers a solution to this problem. A copy of the financial report in XBRL could be emailed from the client's accounting program, which could be read directly by the bank's computer systems.
ADVANTAGES OF THE IMPLEMENTATION OF XBRL
The advantages of XBRL include:
• The need is given for the standardization of the coding process, so that all the information of a financial statement, for example, can be easily understood regardless of the program or platform you use.
* Fast, exact searches. Because all data in an XBRL file, formatted is tagged and related information is joined; If you are looking to research fixed assets with balance and depreciation, you can save more than half the work by conducting a search to find the specific information. By
* Example, if you search the Internet for information on fixed assets from general engines, you will probably end up with thousands of sites to explore, and that is even with the best search tools. But with tagged XBRL data, the search immediately narrows down to your specific fixed asset information data while accurately relating to balance sheets and depreciation.
In fact, if you are collecting fixed asset data to compare one operation of the company with others; you can tailor your search for data from multiple companies and easily export the collected information into a balance sheet for further analysis; Since each piece of information is identified with a label, comparisons and calculations can be automated.
* Data labeling. If you prepare a search query correctly, you can label below the data source and even related authoritative literature that supports the data, such as accounting trends and techniques. This feature will also be available in tagged XBRL financial statements.
* Data register. In most cases, financial information will only need to be entered once, reducing the risk of data entry error. Also, because XBRL information conforms to the international format, users will not need to change it when preparing it for any number of presentations, for example to print a financial statement, to create an HTML document for a company's website, to ready a document., to archive or use another of
* specialized disclosure formats such as credit reports and
* loan documents. Such an advantage not only reduces preparation costs and reduces the introduction of errors, but also improves the investor or analyst's access to information.
* Users receiving the information. An organization using XBRL will not be required to disclose more information than it wants. Users will control the data they disclose, should not make a change to existing accounting standards, users will find the appropriate XBRL templates in compliance with existing standards.
* XBRL will expand career opportunities for CPAs and other financial executives and also add value to financial information for all users: auditors, accountants, bankers, shareholders, and anyone who creates, uses, or accesses a company's business data. organization.
* XBRL for Financial Statements will be useful for the preparation and generation of so-called general purpose financial statements, including their notes.
* XBRL for Management reports: It can be rescued at the level of management reports
* any documentary data within an accounting or managerial information system, * naturally by interacting directly with databases.
* XBRL for the accounting book information; it easily interacts with the transactional data of the accounting information system, exchanging data between different environments and integrating different applications.
* XBRL for tax reports: XBRL will facilitate the exchange of data at the tax level, adapting to established formats, in turn will facilitate the task of tax auditors in the crossing and comparison of data between different entities.
* XBRL for administrative reports: Specific purpose internal reports will be easily generated, which may have the level of detail appropriate to the circumstances as they are not in the public domain.
* XBRL for preparation of working papers: This is a standard method of preparing working papers that support a financial report. Being useful both in an internal or external audit.
* XBRL for Business Reports: Reports can be generated under different methodologies including balance with Scorecard methodology and others.
* XBRL for surveillance and control entities: In the Colombian case, surveillance and control entities will be able to create their own structures according to their information needs, without causing any operational trauma within the organizations, which will also allow them to reduce their internal operating schemes deepen their level of analysis and control.
CONCLUSIONS
Technology in general and the high standardization that is taking place worldwide, force companies to replace their old methods and processes of reporting their results. XBRL will transform both the way of generating financial reports and the analysis of information in a more open and flexible way. The same user through the Internet will be able to design the types of report, analysis of comparisons between companies, businesses and industries, according to their needs.
XBRL is an open, standard language and is not based on any particular product or vendor partner. The use of such language over the Internet can allow new levels of flexibility and transparency in corporate reporting.
The flexibility of being able to enter accounting data only once and in this way be exported from one program to another without changing the figure, figures or languages is very handy to the application of international accounting standards, it presents a valuable tool communication between marketing and business management; which in turn
allows to greatly erase borders such as the language of each country and enables freer negotiations, which establishes the importance of the implementation of a Jurisdiction for each country, despite being such a consistent tool in Colombia, the accounting professional field is at the doors of a shake, and analyzing this information we allow ourselves to ask ourselves: if we have a draft of a bill for the application of international accounting standards, what should it be to seek globalization in the ability to negotiate in our country, why In none of its parts does it mention the use of technology for this Internationalization to be effective, how can our fathers of fiscal and accounting control measure this concept of progress without technology?Are you forgetting that we are at a time where successful companies have learned to harness the power of financial information through the launch of intranets, extranets and corporate websites in an effort to help their employees, investors and financial analysts to safely access the financial reporting knowledge base.?
Marcos Valderrama, the Colombian researcher on the subject, speaks to our profession, determining that the accounting visionaries will therefore already have with the XBRL in their minds the elements facing the Professional Accountant, we will therefore, finally, leave our papers of work to define through diagrams the own documents that will support and support our work, making the world data network available to those interested. And he ends his most recent by saying: "The challenge is proposed and to the extent that Accounting Professionals do not abstract from leading the processes in the management of this type of tools, considering them part of the spheres of other professions, they have broad development possibilities ”.
We then add to this topic that we accounting professionals need to keep up with the accounting advances in the world and not those of the application that our government marks when it finds that it lacks an issue cited in law, because it is proven that on our own we must venture to approach the areas of our profession at the level of the world and not repeat this backward way of taking the advances of the world when they surprise us from behind.
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