This Week in XBRL: What Are the Real Benefits of XBRL?

Over the past several weeks, we have been broadly discussing the benefits of XBRL, and the SEC’s campaign to sell corporations on them. However, it's about time to discuss what those benefits actually are. Today, we’re going in-depth, and laying out exactly why XBRL is a diamond in the rough.

Benchmarking

Among the most obvious of XBRL benefits is the ability to compare your company’s data easily with that of your competitors. You can analyze numbers from “suppliers, customers, shareholders, stakeholders…” and more, all with the tools already in your possession. There is really no reason not to make use of filings for this purpose.

Risk-Analysis

We’ve already pointed out how big Governance, Risk, and Compliance (GRC) is going to be in 2012, and XBRL filings can help shine a spotlight on your company’s weak links. To quote David A. Frankel’s December 12th interview, “[GRC] across the enterprise is a huge issue for companies right now -- and the solutions all revolve around harnessing intelligence from the data they and comparable companies are producing with their filings.”

Transparency

As we’ve stated above, and as Frankel says many times throughout his interview, the biggest single benefit of XBRL is providing companies with a tool to better investigate themselves. The penalties for GRC failings can be severe, and companies with usable XBRL data will be able to maneuver out of their paths before it is too late.

Unfortunately for many companies, the real benefits of XBRL won’t become clear until they approach the language with open arms and a critical but open mind. “Complying with SEC disclosure mandates does not necessarily yield useful results,” Frankel says, “just compliant filings.”

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.