Supporters of extensible business reporting language (XBRL) have long touted its potential to transform financial data mining and analysis. Now that potential is starting to become a reality, thanks to several new software applications.
These tools are designed to help accountants, investors, and analysts extract data from XBRL documents for use in familiar software applications such as Microsoft Excel. This is a major development in the evolution of XBRL, which to this point has focused on companies learning to apply XBRL “tags” to label the myriad pieces of information in financial reports.
The SEC spurred this process by instituting a requirement that all publicly traded companies in the United States file their financial reports using XBRL. The SEC phased in the requirement over several years. The complexity and sheer number of XBRL tags made the process laborious and resulted in a plethora of errors in early XBRL filings. Since completion of the SEC phase-in, companies continue to reduce the XBRL-tagging errors in their filings.
XBRL markup rules allow a motivated individual to identify the concepts presented in an instance document, but the tags, attributes, and values are designed to interact with computers using XBRL-aware software. In other words, the true power of XBRL-tagged data is that computer programs can locate and use specific items of financial information without human help.
A wide range of software packages (e.g., web browsers, word processors, and XML development tools) can open an XBRL document, but many simply display the XBRL tags. Microsoft Excel and Access (and other spreadsheets and databases) attempt to organize the data, but much manual intervention (or very complex coding) is required to create anything resembling a financial statement. Without software tools designed to fully exploit XBRL, statement users must resort to cutting and pasting statement data into their analysis worksheets and databases much as they always have.
A number of software tools designed to fully exploit XBRL data are now available. Because many accountants are comfortable working in a spreadsheet environment, this article examines Hitachi Xinba XBRL Reader and Analyzer, a Microsoft Excel add-in. The article also briefly discusses four other solutions: Altova MapForce, Rivet Software’s Crossfire and CrossView, and Calcbench. The authors have worked with the Altova, Hitachi, and Rivet Software solutions for some time now. Calcbench won XBRL US’s 2011 XBRL Challenge.
Hitachi Xinba launches as an Excel add-in. It adds a menu to the Excel Ribbon that lets accountants create exactly the analysis spreadsheet needed. The menu offers options for opening a company’s XBRL filing, creating and using Excel templates for working with the XBRL data, appending other companies’ XBRL data for comparison purposes, inserting XBRL functions, and performing basic ad hoc analyses.
Xinba features a connector to the SEC XBRL RSS feed (see Exhibit 1), allowing users to keep up with the latest XBRL filings. In addition, users can connect directly to the web address of the XBRL statement.
Xinba distinguishes itself by allowing users to customize Excel spreadsheets while maintaining a live connection to the XBRL data. It can also save XBRL analysis work as a template that can be used to evaluate multiple companies over multiple periods, all in the familiar Excel environment.
Once Xinba has extracted XBRL data to a spreadsheet, the full power of Excel can be leveraged for analysis. The best part is that completed analysis worksheets can be saved as a template to be reused again and again, whether to compare companies or bring in next quarter’s data. Exhibit 2 illustrates one way that key data fields can be located and displayed in tables and charts. By working directly in the familiar spreadsheet environment, an accountant is only limited by his or her imagination.
Templates can also be used to evaluate multiple companies side by side. By “appending” additional companies’ data to a spreadsheet, users can create ratios, charts, or PowerPivot tables that provide any level of analysis the user requires.
MAPFORCE, CROSSFIRE, CROSSVIEW, AND CALCBENCH
The other tools take slightly different approaches to XBRL analysis. Altova MapForce is a robust data extraction and transformation tool that can create multiple connections to extract data from or create XBRL documents, Excel spreadsheets, Access databases, word processing documents, and many other types of files. For example, to extract a few account values to Excel, point MapForce to the source XBRL document and the target spreadsheet file, and connect data fields as needed (see Exhibit 3).
MapForce provides a preview of the resulting spreadsheet directly in its workspace (see Exhibit 4). MapForce can dynamically add data to new rows in a spreadsheet, providing the ability to create a table of values from multiple companies. In addition to basic extraction, MapForce provides a rich set of data transformation tools that give accountants the ability to perform calculations, add filters, and even add branching logic in their data extraction processes.
Rivet Software’s Crossfire is primarily targeted toward creating XBRL filings for public companies, but it also includes a range of reporting tools that companies can use to evaluate their filings and those of competitors. Rivet also created CrossView, an online viewing engine for XBRL documents that is part of the Crossfire platform. The EDGAR XBRL (interactive data) viewer on the SEC’s website is based on CrossView, and users can subscribe to the SEC’s XBRL RSS feed directly within the CrossView environment. After a company of interest is selected, the overall financial statements are displayed in the main window along with a navigation dropdown list and toolbar.
The toolbar provides access to basic charting, printing, and download options, plus a direct link to the SEC EDGAR page for the current filing. Excel spreadsheet downloads include all the data presented in the XBRL document, with each financial statement or disclosure presented in a separate worksheet tab (see Exhibit 5). This provides a comprehensive and well-formatted download but leaves significant cleanup and reformatting work in order to perform comparative analyses. Because the data is organized using the titles presented in the financial statements, rather than the standardized tags used in the XBRL document, it becomes somewhat more difficult to automate analysis activities.
Calcbench Inc. has created a cloud-based repository of scrubbed and normalized XBRL data that users can log in to and access. Calcbench uses artificial intelligence and learning algorithms to correct and standardize XBRL data in its reporting framework. What this means is that Calcbench fills in potential gaps between what companies file with the SEC and what investors may need to perform true side-by-side company comparisons. For example, a company’s balance sheet may include the line items “Cash and Cash Equivalents at Carrying Value” and “Short-Term Investments,” but not the line item “Cash, Cash Equivalents and Short-Term Investments,” which is a summary item that includes both previous line items. Calcbench calculates all summary fields so an analyst can use the summary amount directly instead of having to account for the possibility that the company chose not to report that particular line.
In addition to providing an RSS feed of recent XBRL submissions, Calcbench allows users to access data using one of two primary approaches. The Company in Detail view presents a company’s financial statements. Users can add comparison companies to the view if desired.
As with CrossView, financial statements can be exported to an Excel file. In addition, Calcbench provides a spreadsheet web app that allows users to perform additional analyses and save their work online (see Exhibit 6).
In addition to the Company in Detail view, Calcbench provides a reasonably robust Benchmarker & Analysis Tool for quickly analyzing multiple companies by Standard Industrial Classification (SIC) sector (mining, construction, etc.) or by a custom-defined peer group. In this tool, Calcbench displays a list of companies to be analyzed along with key values from their financial statements. The user can then select additional ratios and items from a dropdown list to include in the analysis. Custom analyses and peer groups can be saved within the Calcbench environment.
Each tool presented above gives professionals useful ways to view, extract, and investigate XBRL information. Exhibit 7 presents a comparison of key product features. Although there is some overlap between the software tools, each provides unique capabilities that appeal to specific users. Some focus on faithful reproduction of financial statement layout and formatting, while others focus on providing explicit control over how data is extracted and manipulated, or even provide tools for online analysis. All the vendors provide at least basic spreadsheet access to XBRL data, while some give users pinpoint control over calculations and treatment of XBRL data. MapForce goes beyond spreadsheets and provides a rich environment for complex extracts to databases, XML, EDI, and even web services. Each is worth considering as part of a professional service firm’s bag of tricks.
XBRL is here, and Xinba, MapForce, Crossfire, CrossView, and Calcbench are but a few of the tools available to help accountants improve the way they interact with and use financial statement data. As good as these tools already are, they continue to get better with each update. That’s a good thing because XBRL use is rapidly expanding. In the United States, financial service firms must file quarterly regulatory reports using XBRL. Many countries are transitioning to XBRL not only for annual reports, but also for corporate tax returns. The savvy accountant needs to work with XBRL documents as a matter of course; these tools provide a head start.
Of course, challenges exist on the way to full XBRL statement analysis: Taxonomies are still under development in the United States and throughout the world; filing guidance currently allows filers to omit summary XBRL amounts if they are not presented in their 10-K statements—users must determine whether products such as Calcbench, which fill the gaps, do so in a way that works for them; and companies are still far down the learning curve of XBRL tagging. Companies and regulatory bodies are engaged in an interactive “learning loop” that will help close these gaps over the next few years. In the meantime, users can take advantage of the wealth of XBRL data already out there.
XBRL in Use: Competitive Analysis
Mary Wilson, CFO of a computer chip-maker, compares her company’s research and development spending with those of her company’s competitors on a quarterly basis. In the past, this task has required her to locate competitors’ latest financial statements, search for the required figures, input them into a spreadsheet, and calculate the R&D/sales ratio for each competitor and her company.
Wilson recently discovered software tools that plug right into Excel and allow her to use the interactive data (XBRL) posted on the SEC EDGAR website. She set up a template using Xinba that collects financial information from the competitors and calculates the required ratios. She opens her competitors’ XBRL instance documents using the template she created for this purpose. The R&D expense and sales information is automatically captured, the ratios are automatically calculated, and charts are automatically generated, allowing her to perform a quick graphical comparison. With the template in place, this process can be repeated each quarter in a matter of minutes. This method takes much less time than Wilson’s previous method for gathering financial data, allowing her to spend more time running the business.
XBRL in Use: Financial Advising
George Henry’s CPA practice has offered financial planning and investment advice to clients for quite some time. Lately, this aspect of his business has grown rapidly. In recent years, Henry has noticed that his clients expect more detailed and personalized analysis of potential investments, including side-by-side comparisons of company valuations, key ratios, selected financial statement items, and even key footnote disclosures. The burden of gathering and presenting this information has turned into a significant chore and has limited the time available to build his practice.
Henry’s friend Mary Wilson, a CFO of a large firm, told him about an Excel add-in she uses to help with the competitive analysis. She showed him how her template allows her to streamline the process of gathering financial report information from multiple companies and analyze it in her spreadsheet.
Convinced that it could help him as well, Henry installed the add-in and built several templates that matched his clients’ most frequent investment analysis needs. When a client called asking about several potential investment opportunities, Henry could bring up the appropriate template, insert the appropriate company symbols and dates, and populate the template with the most current financial statement information. He found that he could provide answers so much faster that he could once again allocate time to building his practice.
More on Software Tools
XBRL applications presented in this article represent just a few of the many software tools available. They are not necessarily the “best,” but they represent a wide range of possible uses for XBRL data analysis. The authors have experience using the tools from Hitachi, Altova, and Rivet Software from previous research and training. Calcbench was included because of the new capabilities it brings to the XBRL process.
Rivet Software and Hitachi were early entrants in the XBRL document-creation field. They both expanded their offerings as XBRL use increased. Rivet’s products appeal to the auditor who needs to validate XBRL documents and review them in their entirety. Hitachi’s Xinba add-in appeals to users who want to build highly customized, spreadsheet-oriented analyses designed for repeated use. Altova’s MapForce benefits data integrators who need to work with XBRL in conjunction with various data sources and targets. Calcbench is geared to users with light-to-moderate analytic requirements and a desire to manage their portfolio of XBRL assets in a cloud environment. Calcbench adds new analytic capabilities to the presentation of XBRL data, but it is still considered a beta application. Regardless, it is worth the time to investigate and see where XBRL data analysis is headed.
For more information about the variety of available XBRL applications, Charles Hoffman’s “XBRL for Dummies” blog (available at xbrl.squarespace.com/xbrl-for-dummies) has an extensive list of XBRL tools for review (see links related to Chapter 14).
The long-awaited potential of XBRL is closer to becoming reality because of several new software applications. The tools are designed to help accountants and others extract data from XBRL documents into, for example, Microsoft Excel spreadsheets.
It’s not hard to open an XBRL document, but without proper software, the data can be difficult to read, let alone turn into a financial statement. The authors review several tools that work in the Excel environment.
Hitachi Xinba is an Excel add-in and has several key features. One is the ability to customize spreadsheets while maintaining a live connection to XBRL data, including side-by-side comparisons of company information. The other products reviewed have more robust data extraction capability with several common and unique features.
As XBRL requirements take hold, companies must adapt. Each tool is worth considering as a way to add value to an organization, especially considering that the tools improve as they are updated.
Mitchell R. Wenger (firstname.lastname@example.org) is an assistant professor, Rick Elam (email@example.com) is the Reynolds Professor of Accountancy, and Kelly L. Williams (firstname.lastname@example.org) is a Ph.D. student, all at the University of Mississippi.
To comment on this article or to suggest an idea for another article, contact Neil Amato, senior editor, at email@example.com or 919-402-2187.
- Introduction to XBRL: Revolutionizing Business Reporting! (#745673)
- XBRL & the New Era in Financial Reporting: Moving Beyond Theory (#745653)
For more information or to make a purchase, go to cpa2biz.com or call the Institute at 888-777-7077.
SOP 09-1, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data