New Standards in Communicating to Financial Audiences; Why You Need to Understand XBRL PDQ
Members of the Cincinnati Tri-State NIRI Chapter and their guests gathered May 10 to learn about the corporate reporting trend of the future: XBRL.
Michelle Savage, vice president of Investor Relations Services for PR Newswire and chairwoman of the XBRL-US Adoption Working Group, presented information about eXtensible Business Reporting Language, or XBRL. About a dozen people participated in a spirited discussion on what XBRL is and is not, what it means to investors and companies, and why the current reporting tools fall short.
As Ms. Savage explained, XBRL is a communications tool, not a technology. Through standardized coding and information tagging, XBRL allows computers to quickly read, process, extract and aggregate information. Where analysts now have to manually sort through reports and re-key critical comparative data into their models, XBRL would allow their computers to instantly access data across a variety of companies, download the databases into any format, and present it in whatever format the analysts choose. XBRL greatly increases the speed with which investors and companies can access information, while at the same time greatly reducing the likelihood of errors.
Ms. Savage demonstrated how quickly it is to access, download and sort XBRL-filed documents from the SEC Web site, noting that the database can be easily converted to any language.
Questions touched on the cost of implementation (mostly a time and human resource commitment), the benefits to companies (speed of analysis, reduced errors and industry standardized tagging, for starters) and an expected implementation timeline (Ms. Savage felt that XBRL is on a fast track).
For more information on XBRL, please visit www.xbrl.org.