XBRL is a computer language for exchanging commercial or financial information. It uses unique tags to classify data, making it easily readable by computers. XBRL is an open standard used by accountants, banks, and other financial entities to perform data processing tasks more efficiently.
XBRL stands for eXtensible Business Reporting Language. The X also stands for XML, an HTML-like computer language that is a powerful means of communication via the Internet. In its most technical form, XBRL is a method for exchanging information of a commercial or financial nature.
The idea behind XBRL is to represent each piece of data as a separate entity with its own identity tag. You can also classify large groups of data with unique tags. Examples of this are net income and business gain or loss. Each of these is known as a taxonomy or method of identifying data in a specific way for a specific purpose.
In this way, the data is made easily readable by computer data processors. While plain text or HTML presentations will list a financial institution’s numbers as blocks of text, XBRL provides a more natural and intuitive way to share data. Think of it this way: You no longer have to manually enter all those numbers. Or, as is more likely to happen, the computer doesn’t have to translate text into numbers and then back into text. Rather, XBRL is a straight swap.
XBRL provides the means to perform a direct transfer of numerical data from one place to another in the blink of an eye. And the faster a computer can process data, the more data processing it can do in a given amount of time. Data searches can take less time, as can credit checks, report creation, investment analysis, and a whole host of other financial practices.
XBRL is not a closed language. On the contrary, it is an open standard. Anyone can use it and no one has to pay a fee. Experienced programmers can customize the XBRL standards for their own ends. Who specifically uses XBRL? Accountants, banks, financial analysts, creditors, economic agencies and stock exchanges are all examples of entities that thrive using XBRL.
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