Extensible business reporting language (XBRL) is a technology format that allows public companies and other organizations to tag data included in financial statements and footnote disclosures. The tags translate the raw information in financial reports into a language computers can understand.
The AICPA on Thursday encouraged its members to read and comment on the new rules. The Institute is represented on the Data Quality Committee, which is tasked with providing guidance on XBRL tagging to the XBRL US Center for Data Quality. The AICPA is a member of the Center for Data Quality and of XBRL US, the not-for-profit organization that oversees the technology standard in the United States. AICPA President and CEO Barry Melancon, CPA, CGMA, is chair of the XBRL US board of directors.
XBRL supporters, including the AICPA, have said for years that the technology opens the door to a much more efficient use of financial reports by analysts and investors. In theory, tools using XBRL can extract key information from public company and other financial data far more efficiently than is possible now. In practice, persistent errors in applying XBRL tags to financial reports have limited the benefits of the technology.
“For investors and other consumers to fully realize the benefits that XBRL can deliver, better guidance and automated rules for mitigating errors in XBRL data is needed. Public review and input is an important part of this process,” Melancon said Thursday in an AICPA news release. “The comments provided over the course of the next 60 days will help the committee improve the guidance and rules that will reduce inconsistencies or errors in XBRL data filed with the SEC.”
The deadline for filing comments is Sept. 14, 2015.
—Jeff Drew (firstname.lastname@example.org) is a JofA senior editor.