XBRL (eXtensible Business Reporting Language) is a royalty-free, XML- (eXtensible Markup Language) based international business reporting standard used in the preparation, publishing, analyzing, and exchange of business financial information. XBRL’s adoption will enable investors, analysts, and business owners better understand and investigate their financial data. Its use, according to XBRL Canada, will significantly reduce the time needed to locate and enter business information.
Use of XBRL will play across a variety of sectors, according to William Swirsky, vice chairman of the CICA (Canadian Institute of Chartered Accountants).
“Now that the Canadian taxonomy (a bilingual dictionary of accounting terms) is finalized,” Swirsky said, “XBRL Canada will lead efforts to educate all players in the corporate reporting supply chain, including software vendors, accounting firms, public companies, governments, news wires, data vendors and the financial community.”
XBRL Canada is part of a worldwide consortium that is creating a standardized method for business reporting in an effort to improve transparency and collaboration. The development of XBRL standards in Canada has been spearheaded by XBRL Canada, of which CICA is the lead member.
“The adoption of the XBRL standard will be a great boon to investors and analysts,” Thomas Taylor, CICA, project director of XBRL Canada, and a principal editor of the Canadian XBRL taxonomy. “It will also be helpful to business people. Once you’ve created an XBRL file, you can print it, create an HTML document or PDF document from it, and then send it over the Internet. If companies file financial reports in XBRL, anyone who has access to the Web will be able to easily extract all or part of that data. Using XBRL will increase the accuracy and speed of exchanging financial information.”
The Canadian XBRL taxonomy covers Primary Financial Statements issued in accordance with Canadian GAAP (Generally Accepted Accounting Principles), and is available on both the XBRL Canada and XBRL International websites.
XBRL adoption is gaining momentum on a worldwide basis, as government regulators and agencies worldwide prepare to accept regulatory filings in XBRL format and as software developers are building XBRL applications. (Microsoft has prototype tools for Word and Excel that will allow users to import XBRL documents.) In the United States, the SEC (Securities Exchange Commission) has adopted a voluntary XBRL filing program, and the FDIC (Federal Deposit Insurance Corporation) is implementing the new standard.
In Canada, however, widespread adoption of the XBLR standard has yet to occur.
“The U.S. and other countries are further along than we are,” said Taylor. “They started sooner, and they’ve have put more resources into play. In the U.S., adoption of XBRL has gained significant momentum from the SEC’s support. In Canada, we now have the OSC (Ontario Securities Commission), as well as Revenue Canada and Statistics Canada as official observers of XBRL Canada.”
In order to explain XBRL and its advantages, XBRL Canada will hold a workshop in Toronto on Dec. 14 titled “The Business of E-filing and E-reporting Planning for XBRL.”