Sunir Kapoor is the President and Chief Executive Officer of UBmatrix. He is also currently serving as a member of the XBRL US board. Sunir previously held executive roles at Oracle, Microsoft, Novell, and a number of Silin Valley startups.

For all the energy expended today on XBRL document creation by filers, the market tends to focus on data “tagging,” losing focus on XBRL’s other unique aspects. If XBRL were just about tagging or “bar ding” data, many other tagging approaches/technologies/standards in the market would deserve our nsideration. What actually sets XBRL apart, though, is the wealth of semantic information that can be associated with tagged data, and the ability this provides to automatically process that information.

XBRL’s distinguishing benefit is that it enables the flow of information that is syntactically rrect, mplete, aurate, and nsistent. This empowers XBRL documents’ creators and nsumers to leverage that information to reap the full benefits of XBRL.

Today, let’s focus on one of XBRL’s key features: validation.

Everyone in the reporting information supply chain benefits from the validation enabled by XBRL’s calculations and formulas semantics. XBRL’s validation rces the number of errors introduced into this reporting process, helping address the classic “Garbage In / Garbage Out” challenge. For example, filers can use XBRL calculations and formulas to validate their filings before submission.

XBRL validations can take various forms. The Calculation Linkbase allows filers to check their XBRL documents for simple math errors. The Formula Linkbase allows the filer to validate their XBRL documents against a set of business rules — and XBRL is extremely powerful in its ability to support a wide range of such rules. Examples include checking whether calculations are within a given tolerance; checking ratios amongst reporting items and raising a flag if the ratio is out of norm; and checking for a valid filing, for example, if ncept A is reported, ncept B must be reported.

To allow everyone in the information supply chain to clearly understand what defines a valid information exchange, XBRL’s Calculation and Formula Linkbases can be shared between the nsumer and creator of XBRL documents. Furthermore, because these business rules live in the taxonomy and are not hardded into the applications that either create or nsume XBRL documents, it is easy and quick to update business rules and mmunicate these changes to all parties.

Formulas have already demonstrated value in production systems. While everyone talks about the FFIEC/FDIC as among the first suessful large-scale projects, what isn’t often discussed is the key role that XBRL formulas played in its suess. The XBRL formulas written by the FDIC have allowed banks to pre-validate their filings before submission, with dramatic -line results. Submissions with rrect math have increased from 70% to 100% of filings. The number of “clean” submissions have increased from 66% to 95%. With respect to the SEC’s XBRL mandate, formulas now can be used to check XBRL filings against the EDGAR Filer Manual. Charlie Hoffman has been using formulas to apply additional validation checks against SEC filings.

A current example that highlights how XBRL validation uld improve the reporting information supply chain is in recent news regarding American Revery and Reinvestment Act (ARRA) stimulus reporting in the United States.

To qualify for stimulus money, recipients are required to fill out detailed federal forms, but with 130,000 recipients and 99 data fields to enter, there’s much room for error. ernment Acunting Office analysis of the first round of reports from recipients showed 3,978 reports that “showed no dollar amount received or expended but included more than 50,000 jobs created or retained.” The GAO also found more than 9,000 reports that showed no jobs created or retained for more than $1 billion spent. Reports have circled describing money being spent in non-existent ngressional districts.

Simple XBRL formulas uld have checked the validity of submissions like these — e.g., checking for a rrect ngressional district — and flag outliers that need review, such as the ratio of money expended vs. jobs created.

The market needs to figure out how to exploit XBRL’s key benefits -- taking advantage of validation, one of its key differentiators. The risk of failing to do so is that XBRL would end up just one among many data exchange technologies, and the information supply change would miss out on sorely needed improvements.