Thursday, December 18, 2008
SEC mandates XBRL
The SEC has voted to mandate the use of XBRL (Extensible Business Reporting Language), an XML document type for business reports by many companies. The amount of confused reporting in the financial news is amusing. Forbes tells us that XBRL tags "are like bar codes and can be attached to each piece of financial data."
Some people expect that this requirement will greatly simplify analysis and comparison of business data, permitting "apples to apples" comparison. A few people have even suggested that if this requirement had already been in place, some of the financial collapses of recent months wouldn't have happened.
I haven't looked carefully enough to form an opinion. XBRL is clearly a complex specification for a complex field, it will take more than a schema to make different business models fully comparable. With other complicated schemas, such as MODS, there are so many options that comparing two documents isn't easy; this is likely to be true of XBRL. It will doubtless be an improvement over free-form documents, but people's expectations might be unrealistic.
