XBRL Paper

Financial Accounting Theory (5th Edition)

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Unformatted text preview: ACCT 803 Natalja Callahan, James Hartnett, November 24, 2009 Megan Lintel, and Matt Steger XBRL: Electronic Delivery of Accounting Information I. Introduction “XBRL is real … it’s relevant to the issues in today’s financial crisis and can be a part of the solution to establishing better reporting systems and getting the markets back on track,” Mark Bolgiano, XBRL US CEO and president, testified in front of Congress’ Domestic Policy Subcommittee. 1 Indeed, on January 30, 2009, the Securities and Exchange Commission [SEC] began its XBRL compliance system by mandating that the 500 largest companies in the United States begin filing their quarterly reports on June 15, 2009, using XBRL. The next 1,800 largest companies will join in June 2010, and all publicly traded companies will follow in June 2011. 2 Although “the new rules will not change any substantive disclosure requirements, and companies must continue to file financial statements in traditional formats,” 3 because of the new rules, it is important for companies to understand XBRL. This paper will discuss what XBRL is, the benefits XBRL can provide, and potential drawbacks to its use. II. Overview of XBRL Extensible Business Reporting Language [XBRL] is a form of technology language which was created to electronically deliver business and financial data around the world. It has revolutionized business reporting around the world. XBRL is most likely to become a standard 1 1 Mark Bolgiano (XBRL US Chief Executive Officer and President). Quote from: U.S. Congress. “Panel II of a Hearing of the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee; Subject: TARP Oversight: Assessing Treasury’s Efforts to Prevent Waste and Abuse of Taxpayer Funds.” (Date: 3/11/09). Text from: Federal News Service, Inc. Available from: Available from: LexisNexis® Congressional; Accessed 23 November 2009. 2 2 SEC Final Rule 33-9002, Interactive Data to Improve Financial Reporting , eff. April 13, 2009. 3 3 Brashear, Jim. SEC Mandates Interactive Data Financial Reporting . The Corporate Governance Advisor, May/June 2009, Vol. 17 No. 3, p. 27. 1 ACCT 803 Natalja Callahan, James Hartnett, November 24, 2009 Megan Lintel, and Matt Steger way of recording, storing and transmitting business financial information. 4 XBRL has many great benefits such as improved data quality and increased efficiency in financial reporting which leads to substantial monetary savings. However, one of the greatest benefits of the XBRL is that it can be implemented anywhere in the world no matter what language is used in that particular geographic location. XBRL can benefit not only large companies, but also governments and various organizations by improving their operational processes. Regulators of financial information increasingly demand the use of XBRL in the financial statements. The regulators are joined by lenders and other various consumers of such information. Under perfect conditions, it could be assumed that XBRL provides some convenience and a worry-free...
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XBRL Paper - ACCT 803 Natalja Callahan, James Hartnett,...

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