Another good resource on what XBRL is, from the founder Charlie Hoffman in an O’Reilly webcast.

The Semantic Web is a concept of billions of web pages having intrinsic structure, sense and ability for machines to create knowledge from them. Currently services like Google can match the text you’re looking for with the text on its servers. But can it add, translate, merge and collate this information?

XBRL is financial data organised into a semantic fashion (mapped to taxonomies). This gives it wings in hundreds of ways not yet dreamed off.

The release of Wolfram Alpha is noteworthy, and not because it gives unimaginative and redundant sub-editors headlines like “Is Wolfram Alpha the next Google?” It has gathered information in a semantic relationship engine which allows it to things like this:

http://www87.wolframalpha.com/input/?i=MSFT+YHOO+JAVA

It compares financial information and can create things like ratios on the fly. Test it to believe it.

A few minutes ago the announcement was made that Pravin Gordhan, current Commissioner for SARS, has been handed the position of Finance Minister. Current minister, Trevor Manuel, moves on to run a new economic planning commission.

Pravin Gordhan

Gordhan has spoken at XBRL events in South Africa, and believes the standard will be an accepted mode of business reporting. He has approved XBRL activity at SARS, and may lead with accepting corporate tax returns.

Extensible Business Reporting has undoubtably got the kinetic energy to become a political football. XBRL seems to have been nurtured by outgoing US SEC chairman Cox, but owing to the fiascos that happened on his watch, it made sense that new chairman Shapiro would distance herself from it, saying it was not a priority.

What this will mean for XBRL adoption in South Africa is going to be a question as big in these parts as the endless waiting for last year’s SEC mandate.

This press release from XBRL US - the governing body of XBRL in the United States. Please go to the site to download the testimony and other related documentation:

XBRL US Testifies to Domestic Policy Subcommittee of the Oversight and Government Reform Committee 
Reports technology standard is real, ready and relevant in current financial crisis

March 11, 2009, Washington, DC - XBRL US reported today to the Domestic Policy Subcommittee hearing of the Oversight and Government Reform Committee.  The hearing, on the Treasury Department’s oversight of the use of funds by financial institutions under the Troubled Asset Relief Program (TARP), addressed data collection procedures to monitor the use of funds and the ability of the Treasury to detect and prevent waste and misuse of funds.

Prepared remarks given by Mark Bolgiano, President and CEO, XBRL US, described how the use of a free, open-source technology standard can be used to provide citizens, government and investors consistent, comparable reporting on the existing pool of securitized assets, help regulators track the disbursement and use of TARP funds and enable more effective regulation by government.  XBRL is a standard agreed upon by industry and government that makes information computer-readable and therefore more easily searched on, extracted and analyzed. 

XBRL US is the nonprofit consortium for XML data standards and is responsible for bringing together industries to convert US GAAP accounting requirements and common practices into a standard digital dictionary for more transparent reporting by publicly-traded companies.  The Securities and Exchange Commission (SEC) mandated the use of XBRL for public company reporting, with compliance starting in June 2009.  XBRL US also developed a dictionary of terms for the risk return summary portion of mutual fund prospectuses and has other projects under way including corporate actions announcements and proxy statement data for executive compensation reporting.

 “XBRL is real.  It is in use today for over 8,000 banking institutions that report to the FDIC and starting this summer, approximately 500 public companies will start reporting in XBRL to the SEC, with the balance complying over the next two years,” said Mr. Bolgiano, “XBRL is ready.  The market is equipped for even broader applications.   And it’s relevant to the issues in today’s financial crisis and can be part of the solution to establishing better reporting systems and getting the markets back on track.”

Mr. Bolgiano’s testimony detailed an XBRL standard for residential mortgage-backed securities (RMBS) used for the full life cycle of securitized assets: valuation on issuance, surveillance and bond remittance.  XBRL US worked with multiple industry sources to develop the standard and has demonstrated it to industry and government leaders.  A working group of experienced industry professionals to lead the RMBS initiative will be chaired by Philip Moyer, President and CEO, EDGAR Online, Inc. and a member of the XBRL US Board of Directors.

Mr. Moyer authored a white paper on the benefits that standardization in XBRL can bring to industry and government leaders working to alleviate the current financial crisis; the white paper was a key resource for the XBRL US testimony.  The white paper is available for public comment on the XBRL US website at http://xbrl.us/Pages/whitepaper.aspx.

For more information, contact Michelle Savage, VP, Communication, XBRL US, michelle.savage@xbrl.us.

XBRL (eXtensible Business Reporting Language) is a standard of assigning semantic concepts to financial or business reports. These concepts are rooted in an agreed taxonomy, usually based around an accounting standard.

Once financial or business reports have been marked up in XBRL, computers can perform complex analysis and dissemination as each line item, heading and figure can be read by computer systems.

XBRL saves time: less rekeying of data, instant analysis, faster auditing
XBRL is more transparent: software can create analysis quicker when data has underlying structure and relationships.

From the Shenzhen Stock Exchange:

The Shenzhen Stock Exchange (SZSE) rolled out the XBRL information service platform for listed companies recently.

The platform, optimized and upgraded on the basis of the XBRL trial application website, was launched when listed companies started to unveil their annual reports for 2008.

The platform (http://www.szse.cn or http://xbrl.cninfo.com.cn/XBRL/index.jsp), serves small and medium investors, was based on XBRL standardized data and was incorporated with functions such as display, analysis and download of listed companies’ information.

The launch of the platform indicates the SZSE is heading towards a multi-layered and diversified approach for its XBRL standardized information service for listed companies.

It is noted the XBRL (eXtensible Business Reporting Language), a global standardized technology for financial information, was widely recognized and promoted across the world because it’s readable and comparable in computers and easy for data flow and data treatment.

Currently, the platform provides the query and display of XBRL document data of the reports of all 740 companies listed in Shenzhen from 2004 to 2008.

Principals from the SZSE introduced that investors can find financial indicators in an easy and quick way through the platform’s functions like information query, analysis and comparison, graph display and file download. Comparison and display of historical financial indicators of the same company or a certain financial indicator in a number of companies are also available.

Meanwhile, the application of XBRL in securities industry has a far-reaching impact in securities information disclosure. It can achieve the information share and operation of listed companies in the industry and the securities industry, pushing the standardized advancement of listed companies’ information disclosure and the securities information service industry.

By closely tracking the change of business rules and timely amending the XBRL information disclosure standard for listed companies, the completeness and consistency of information disclosure documents made by listed companies can be testified.

It’s here: the mandate for XBRL to become an official filing process, alongside EDGAR, for listed companies in the US.

The SEC announced this in a long-awaited roundtable today, 17 December 2008. The IDEA system was launched today too. This has followed on the completion of the US GAAP taxonomies.

Immediate impact:
Companies that are listed in the US (even foreign-owned) will have to begin a process of filing in XBRL in addition to current EDGAR requirements. It will not replace EDGAR at first, and will have to be placed on the company website (if it has one). Mutual funds will have to do same for risk-return summaries.

This is a phased approach, beginning with companies with a worldwide float of over US$ 5 billion and a december year -end. There will be limited liability, the same as in the voluntary filing program. If you satisfy these requirements, talk to your EDGAR vendor tomorrow.

The big picture
XBRL software vendors will see some consolidation in the market; I believe an influx of developers from the consumer-centric web 2.0 world may find that XBRL combines their aspirations of mashups and service oriented achitecture, and financial analysis apps will experience a steep innovation curve.

At the same time, SAP and other ERP vendors will escalate XBRL within their products, for internal analysis and risk management presented in visual fashions.

Foreign markets will see the world’s biggest endorsing XBRL unconditionally, and rush to complete their taxonomies.

There is likely to be too much credit given to XBRL in the early , pre-and post inauguration days: it is not a panacea, but currently it looks like the best idea going. The ultimate aim, though never stated, is 24-7 disclosure: from the General Ledger to the markets

After weeks of speculation and false starts, it became clear that this would be a political decision. The lack of oversight in Wall Street and Washington is clearly an ethical and governance issue, but it has become clear that XBRL could go a long way to allow for better analysis, rapid decisions and early warning systems. It may not be the sherriff, but it’s the sherriff’s mustang.