This Week in XBRL

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

In the ongoing coverage of the recovery process Japan is going through as a nation, Homeland Security Specialist W. David Stephenson offered his thoughts on how Japan can begin building themselves back up:

Fast forward to today, which I suggest offers a perfect situation for Japan to again pioneer in a management innovation. In this case the distinction would be to become the first nation to create a framework for a seamless flow of information within and between both government and industry.

The key tool to achieving this breakthrough is the eXtensible Business Reporting Language, XBRL, a global standard, free tool for sharing data by attaching "tags" to it that give it context and meaning. For example, the number 1600 by itself could denote anything from the White House's address to calories in a recipe. However, when bracketed with the XBRL tag "quantity," (1600) its meaning is immediately apparent. Even better, once tagged, data can automatically flow anywhere you choose where those same tags are present: within your company, to a trading partner for supply chain integration, and to a government agency.

On a different aspect of the topic, with approximately 120 days left before the XBRL deadline, the IR Web Report recently published 4 main criteria for selecting an XBRL preparation solution (a solution like Merrill's XBRL Complete). The criteria is as follows (and should be weighted differently according to your company priorities):

1. Time Commitment - "The time spent on the XBRL may vary significantly, and will be split between internal and external resources."
2. Price - Every vendor will quote a price, but what is included in that price? Is it the price just for the software or does it include the consulting time (and which does your company need)?
3. How much XBRL do you actually want to learn? - In line with the "Time Commitment" component, vendors should be able to provide an idea of how much XBRL knowledge you need to know as a company vs. how much can be supplied by the experts on a need-to-know basis.
4. Vendor experience with XBRL - "In 2009, approximately 500 companies submitted XBRL to the SEC for the first time; in 2010, an additional 1000 did so. In the second year of XBRL filing for each of these companies, there was the additional burden of “detailed tagging” their financial statements to contend with. This year there are projected to be an additional 8700 companies providing XBRL for the first time."

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