My research will be based on a Public practise accounting firm. This firm is expanding its operations. They plan on opening two more branches. They will have close to 50 employees once these two additional branches are operational. Therefore, I think XBRL will be useful for my employer.
Extensible Business Reporting Language (XBRL) is an XML based language developed specially for the purposes of financial reporting. In the past financial reporting was done manually. Which normally had lot of mistakes and it used to be often duplicated depending on who is going to use it. This use to be very time consuming. Goal of XBRL is to automate this process.
Since this Public practise firm provide services to mainly the large corporations. And not all corporations have the same reporting standards. The first advantage of using XBRL is that it has a great advantage of adapting easily to a variety of different accounting standards, currencies and even different languages. Second advantage would be that this firm will be able to audit their clients on a continual basis and there will be less research time required. Hence, high productivity less costs that will equal existing clients being happy and firm can concentrate on getting more clients. Firm will also be able to analyze companies faster than before and provide answers or solutions to their clients fast. Third advantage is mainly for the clients of this firm, which in turn benefits the firms in revenue. Investors of those companies can easily look at their company’s current statements from their home and don’t have to wait for the year end statements.
XBRL will be used to digitally produce financial statements of companies for external users. XBRL based financial statement will include the balance sheet, income statement, statement of equity, statement of cash flows, and the notes to the financial statements. XBRL documents can be prepared efficiently and are more reliable. These documents will also be able to be analyzed quickly by the interested parties. This saves a lot of time and in today’s world they say “time is money” which means smarter investments.
XBRL will provide a quick transfer of data from one place to another. This will also reduce data search time. Companies will be able to do faster credit check, build reports, and do a quick investment analysis. Anyone can use XBRL; there is no license fee to use it. XBRL can be customized to meet individual company standards. Accountants, Banks, Financial Analysts, Creditors, are few example of people that will be using XBRL.
Following steps are needed to start using XBRL(1):
1) Use a final Word or Excel version of the financial statements to tag
2) Download the most recent version of XBRL by going to “www.xbrl.org”
3) The files with the extension xsd and the other .xml files are the link base files. All are required to properly work with the zip file listed there contains all the files needed.
4) Download these files (or the zip file) to a new folder on your computer or on your server
5) Install an instance document creation tool (e.g. IBM, DELL). These are available from their websites. The URL’s for their websites can be found at http://www.xbrl.org/TechSupport/.
6) Select the financial statement item to tag and find the corresponding element.
7) An extension maybe required for the items not found.
8) Complete the tagging
9) Run a validation test to see if it is properly prepared.
10) Upload the XBRL instance document to your Web site and to Sedar
SITES VISITED:
1) www.ifac.org/MediaCenter/files/259_IBall_XBRL_Automation.doc
3) http://en.wikipedia.org/wiki/XBRL
4) http://www.nysscpa.org/committees/emergingtech/xbrl_2003.htm
5) http://www.de-haas.nl/Digital%20Reporting/XBRL%20Benefits.htm
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