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Financial data standard gathers momentum

05 March 2002  |  3862 views  |  0 pie chart

Microsoft has become the first technology company to publish its financial statements on the Internet using Extensible Business Reporting Language (XBRL), an XML-based framework for financial reporting.

The company’s second-quarter earnings results, as well as the first- and second-quarter 10-Qs and fiscal year 2001 10-K statement, are published as XBRL documents on its Web site today, in a move timed to coincide with an International XBRL conference and steering board meeting in Berlin.

XBRL has been promoted as a major step forward in the preparation, publication, exchange and analysis of financial data. The standard uses common tags to identify generic information within financial documents, making it easier for investors to find, share and analyse data.

John Connors, chief financial officer at Microsoft, comments: "We used to spend a great deal of time creating and formatting reports, but with XBRL, we will be able to render the basic financial information once and deliver it in whatever format is needed, whether for our Web site, regulatory disclosure purposes or internal management use."

Microsoft's participation is a major boost for XBRL. Only two other companies - Reuters and Morgan Stanley Dean Witter - have so far published accounts using the format.

For banking institutions, XBRL is designed to facilitate straight-through reporting of loan and credit analysis information between credit applicants and the lender while significantly reducing errors and shortening the amount of time needed to process the information.

Deutsche Bank, for instance, has begun using XBRL to process loan information and streamline its credit analysis process. Deutsche Bank's adoption follows closely on the announcement by Bank of America that it has begun to pilot XBRL for the same purpose in the US.

"XBRL will helps us achieve straight-through reporting of financial information in our lending process, streaming data directly from our clients' general ledgers to our credit analysis database," says Norbert Flickinger, vice president, credit risk management, Deutsche Bank. "XBRL allows us to spend more time on analysis and less time gathering data. XBRL also gives banks the ability to provide businesses with benchmarking data they can use to position their operations more effectively in the marketplace."

Walter Hamscher, chair of the XBRL international steering committee, expects momentum to gather behind the standard, following the release of the XBRL specification along with the IASB, UK, German and General Ledger taxonomies. "Financial services companies and regulators are anticipated to quickly adopt XBRL to more effectively meet their lending and regulatory processing needs," he says.

The Australia Prudential Regulation Authority (APRA) recently became the first banking regulator in the world to use XBRL to monitor the financial well being of 12,000 Australian super funds, insurers and banks required to report to APRA on a regular basis. APRA is sharing this aggregated data with the Australian Bureau of Statistics and the Reserve Bank of Australia for benchmarking and trend analysis. In the United States, the Federal Deposit Insurance Corporation (FDIC) recently announced its desire to use XBRL for regulatory reporting for US banks in the near future.

In a separate announcement, RIXML.org - which is developing a similar standard for the distribution of financial research - has welcomed the addition of OppenheimerFunds as a new steering committee member, bringing the total to 18, and the appointment of new committee co-chairs for selected committee seats within the RIXML organisation.

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