Gaining the Full Benefits of XBRL
by Gerald Trites, FCA 

As the adoption of XBRL spreads, some companies are asking how they can get more value from their implementation efforts.

There is a way, one that has been touted by various people and organizations for some time - implementing XBRL within the system, rather than simply adding it on at the end of the reporting cycle.

Most companies that have implemented XBRL so far have been missing the boat. They have added XBRL using the so-called "bolt-on" approach, and most have outsourced it to intermediaries. The result is that they do not gain any inside experience with XBRL and they do not gain the advantage of being able to use it for internal reporting.

If they were to implement XBRL by using their own internal resources, which would include both IT people and accounting personnel, they would gain internal knowledge of XBRL and what it can do. If they were to implement XBRL at a level in their information system that makes sense to them for their internal reporting as well as their external reporting, they would be able to leverage it for both internal and external purposes. This would mean that tagged data could be used and reused with the system, making it possible to manage the data much more effectively and making possible improvements in the internal information systems, including the executive information systems. Use of XBRL for internal reporting would mean that the data would be portable across the enterprise, even when there are very different platforms involved, and could be re-used for different purposes.

With the bolt-on approach, companies do not gain these advantages. Instead, they tend sometimes to see XBRL as simply an added burden to the reporting cycle, carried out after the reporting cycle is done, and one that they don't get any real value from. The fact is they will get value through better analyst coverage and better understanding by their stakeholders of their data, but they don't always see it that way. If companies adopted it within their information systems, they would see the benefits quickly. Yes, there would be a cost, but chances are the benefits would exceed them.

Most recently ISACA together with IFAC released a report called, aptly, "Leveraging XBRL for Value in Organizations", which is available for free from the ISACA site. That report expounded on the benefits of integrating XBRL into systems. It echoed in its central message a report produced by the CICA three years ago, called "Interactive Data - Building XBRL into Accounting Information Systems", which carried the same message. (Available at the CICA site)

Hopefully more companies will start to heed this message - and thereby gain the full benefits of adopting XBRL.