Michal Piechocki is CEO of the Business Reporting Advisory Group (BR-AG), an international XBRL advisory company. He is an XBRL International Steering Committee At Large Member and also serves as a Member to the XBRL Quality Review Team of the IASC Foundation. He will be conducting Taxonomy Development Training at the 19th XBRL International Conference in Paris. He can be reached by email.

Suppose learning XBRL was like baking a cake. What would be the recipe?

Start with taxonomies, extensions, instance documents, FRTA, FRIS, business reporting supply chain, dimensions, formulas, versioning, rendering, arcs, extended links, layers, references, contexts, units, and footnotes. Mix in modularization strategies, design approaches, and architecture variations. Spice it up with the XBRL specifications technical jargon, and top it off with the inherent complexity of the accompanying accounting standards.

The result: a ten-foot-high gastronomic wonder that XBRL experts have learned to consume.

But… for most users, must XBRL really be so complex?

All students of XBRL, either enthusiastically interested to learn about the standard or obligated to prepare electronic financial reports, must contend with the labyrinth of baffling concepts used by XBRL experts. The complexity multiplies if you are not proficient in English and need both to acknowledge the technical terms and digest and apply the underlying knowledge at the same time.

Fortunately, there exist several levels of understanding of XBRL, and, depending on your needs, you may not be required to tackle many of the its thornier problems at all.

Let’s try to organize the XBRL Knowledge Domain.

First, we have several sources of information:

1.            Official XBRL specifications: recommendations, candidate and proposed recommendations, public working drafts, and requirements documents;

2.            Official XBRL best practices announcements;

3.            Publicly available white papers and educational materials;

4.            Official XBRL taxonomy websites (e.g. IFRS, US-GAAP, Basel II);

5.            Official XBRL projects websites;

6.            Presentations and course materials from XBRL conferences;

7.            Commercial resources and training material.

Key Point: There is an abundance of XBRL explanatory and guidance materials. The majority of them are publicly available. Search and familiarize yourself with available resources.

Second, analyze knowledge requirements from the perspective of the user. The software vendor willing to build XBRL into its products will have demands distinct from those of an SEC filer obligated to prepare a financial report.

Here are the most common user groups from the business reporting supply chain (BRSC):

l          Preparers of reports (e.g., corporate entities);

l          Regulatory bodies (e.g., Securities and Exchange Commission);

l          Software providers (e.g., ERP system providers);

l          Financial services providers (e.g., auditors);

l          Data vendors (e.g., data agencies);

l          Investors and financial analysts (e.g., CFAs).

Each requires different levels of XBRL awareness, and the existing knowledge base provides public and commercial resources for all levels.

For example, preparers do not necessarily need to dive into the deep waters of XBRL specifications. On the contrary, they should be more focused on the scope of the data to be provided within the XBRL report. The complexity of the XBRL standard might therefore be hidden in appropriately constructed software.

The opposite approach should be taken by software vendors, who are encouraged to explore not only the specifications but also the reasoning behind them (to decipher this, historical mailing list discussions can be helpful). This approach should help developers prepare more accurate, valid, and more efficient solutions.

Key Point: Place yourself on the BRSC and approach learning about XBRL from that perspective.

Third, get involved in international discussions and directly contact XBRL experts. The XBRL standard has been here for the past 10 years, and public mailing lists have thousands of individuals who are able to provide answers to your questions. XBRL International, together with regional jurisdictions and over 600 member entities, provide multiple opportunities to understand comprehensively the standard and apply practical solutions to streamline your daily financial routine.

Key Point: Don’t be afraid to reach out to the community or the organization itself. You may encounter individuals who will politely guide you simply to read the manual in case of extremely basic questions, but there is a much higher probability that you will find supportive members pointing you in helpful directions.

The XBRL knowledge domain is admittedly broad. However, step by step, you will find that the initially indigestible cake consists of hot raspberries at the bottom, vanilla ice cream in the middle, and chocolate at the top. It may actually be very tasty.

Welcome to the XBRL emporium!