The thought of tagging your company’s financial statements may seem remote if you’re a private company. It may not be so far off after all.
The push for XBRL (Extensible Business Reporting Language) technology standard is gaining momentum. The latest: SEC just released a series of XBRL US GAAP taxonomies to help public companies with their tagging and preparing of financial statements and other reporting duties.
You don’t want to sound the alarms yet. But finance execs in all industries and of all sizes may want to start getting their staffers used to the idea.
Get staffers used to the lingo
A great way to do that? With this glossary of key terms, courtesy of the folks at XBRL, Inc.:
XBRL: an XML-based technology standard that improves the way information is created, processed, distributed and analyzed by using “tags” that package info such as definitions, labels, references and time period around individual numbers or text.
Taxonomy: a dictionary of terms used to describe a particular reporting situation such as the XBRL US GAAP line items which include terms such as net income, EPS, cash, etc. Each term has specific attributes that help define it including label and definition and possibly references.
Tags: individual elements within a taxonomy, e.g., net income.
Dimension: a tool in the XBRL standard that allows preparers to leverage XBRL tags to create simple tables and more complex pivot-style tables within financial statements, e.g., to define segment data.
Extension: a company-defined line item that isn’t available in the current taxonomy. If you have a very unique reporting situation that isn’t available in the taxonomy terms, you can create new custom terms.
Instance document: an XBRL-enabled document. For example, an income statement from your company.
