Six Steps to XBRL: Learn How to Translate Your Income Statement into Tagged Format
EXECUTIVE SUMMARY * XBRL is reinventing how we transmit and Use data in business. XBRL is not just for SEC companies: Small businesses and practitioners alike could soon be using XBRL to submit information to bankers, the IRS, and other agencies. XBRL will become a part of every CPA's practice. * XBRL is a language for electronic communication of business data. Each item is tagged with information regarding various attributes. XBRL-tagged data can be read by any software that includes an XBRL processor and thus can be easily transferred between computers. * A draft of the new XBRL US GAAP Taxonomies was released to the public on Dec. 5, 2007. Comments are due by April 4, 2008. The banking industry has successfully used XBRL for its FDIC call reports since the first quarter of 2005. XBRL is already in use internationally. * This article explains step by step how to tag a simple income statement for a sample company. A number of other XBRL tagging tools are commercially available. The authors recommend that users carefully consider more than one tool in light of their specific needs. ********** [ILLUSTRATION OMITTED] XBRL (eXtensible Business Reporting Language) is reinventing how we transmit and use data in business A number of companies are already submitting reports to the SEC through the voluntary XBRL program. However, XBRL is not just for SEC companies: Small businesses and practitioners alike could soon be using XBRL to submit information to bankers, the IRS, and other agencies. In fact, XBRL will become a part of every CPAs practice, both large and small. XBRL is a language for electronic communication of business data. Each item (depreciation expense, for example) is tagged with information about various attributes, such as calendar year, audited/unaudited status, currency, etc. XBRL-tagged data can be read by any software that includes an XBRL processor and thus can be easily transferred between computers. To create XBRL documents, you do not need to take an XML computer programming course. Software is available to tag data for clients, submit tagged data to various recipients, and receive and analyze tagged data from other sources. RECENT DEVELOPMENTS In 2006 the SEC awarded a contract to XBRL US to develop taxonomies, which are dictionaries for tagged data, for U.S. financial reporting. A draft of the new XBRL US GAAP Taxonomies was released to the public on Dec. 5, 2007. Comments are due by April 4, 2008. The banking industry has successfully used XBRL for its FDIC call reports since the first quarter of 2005. In addition, XBRL is already in use internationally. For example, China requires XBRL filings for its public companies, and XBRL is being used in public reporting in Japan, Spain, the Netherlands, the U.K., and other countries. PURPOSE The purpose of this article is to give CPAs unfamiliar with XBRL an opportunity to see that assigning XBRL tags to financial statements does not require specialized expertise, but rather is something that any CPA can do with the help of software tools and a little practice. The article explains step by step how to tag a simple income statement for a sample company. The authors selected Rivet Software's Dragon Tag to create their document because it is currently the most common tool used by issuers participating in the SEC's voluntary filing program (see Exhibit 1). A number of other XBRL tagging tools are commercially available. The authors recommend that users carefully consider more than one tool in light of their specific needs. Step One: Download the taxonomies. A taxonomy is a dictionary of tags used in the markup process. For demonstration purposes, go to the new US GAAP Taxonomies that are currently undergoing public review at http://xbrl.us/usgaapreview/Pages/ default.aspx and select "Download Taxonomies." Download the zip file containing the taxonomies, and save it on your hard drive, since this will be used in setting up the entity's profile in Step Three. …