One of the annoying things about printed documents in this electronic age is that you have to do quite a lot of work to turn them back into machine-useable form. This is particularly true of mplex documents like a mpany’s report and acunts.

Analysts and users of acunting information would love to get these reports in a form which makes it really easy for them to strip out the numbers that they want to examine and have these numbers dumped straight into the relevant portions of their spreadsheets. Unfortunately, until now this has involved either doing it by hand, by re-keying all the information, or, if you were senior enough, delegating it to someone else to do (with plenty of opportunity in the process for py and transposition errors to creep in).

Enter XBRL, or Extensible Business Reporting Language. In a Policy Statement issued in December 2009, the Federation of European Acuntants (FEE)—the send “E” mes from the French for acuntants, “Experts mptables”—points out that whereas PDF documents in Adobe PDF format or HTML web documents are static in nature (you can cut and paste them, but that’s it), XBRL opens up dynamic possibilities.

By its nature, XBRL is about making financial data portable between mputers. Each item of data is “tagged” and the tag includes information as to the rules for processing that information. As the FEE notes,

“puters can treat the data ‘intelligently’: they can regnise the information, select it, analyse it, store it, exchange it with other mputers and present it automatically in a variety of ways for users. In this way, XBRL greatly increases the speed of handling of financial data, rces the chance of error and permits automatic checking of information.”

These same virtues make it ideal for regulatory authorities, from tax authorities to customs, to receive XBRL documents filed electronically. Moreover, this is not just a “big rporate” development. The International Acunting Standards Board (IASB) is busy developing an International Financial Reporting Standard on an XBRL “taxonomy” (a llection of tags) for small- to medium-sized mpanies, which it is schled to release in April 2010.

Since the whole aim of XBRL is interchangeability and for mparable bits of data from different anizations to be easily stripped out into, say, a table and mpared, the XBRL initiative tends to stand or fall by the nsistency with which preparers of financial information use the XBRL tags. This is why the “taxonomy” efforts of the standard setting body, the IASB, are so important. If you use a tag one way and I use it a different way, an analyst trying to mpare the resulting acunts is going to end up cursing both of us when he/she ends up with two bits of information that purport to be mparable but actually are not. All XBRL will have achieved in that instance, is to add a fresh challenge to what has always been a difficult exercise, namely mparing mpany A with mpany B.

One of the big positives that flow from using XBRL for mpanies who get it right, acrding to FEE, will be enhanced mmunication with investors via the inter All the signs are that the XBRL train is rolling and is now unspable. What remains is for acuntants and auditors to sharpen up their engagement with it.