XBRL (eXtensible Business Reporting Language):

XBRL stands for eXtensible Business Reporting Language; it is a programming language designed
specifically to facilitate the communication of business information. The SEC requires U.S. public
companies to use XBRL when submitting their filings.
To understand the revolutionary nature of XBRL, examine Figure 16-8 (see p. 504). The top portion
shows that prior to XBRL, preparers had to manually create reports in various formats for different
users. Although those reports were then sent electronically to users, the recipients then had to reenter
the data into their own systems in order to manipulate it. The entire process was inefficient and prone
to error.

The bottom portion of Figure 16-8 shows how XBRL improves the reporting process. Preparers
encode the data and transmit it electronically in various formats to users, who can directly analyze it.
Thus, XBRL saves time and reduces the chances for data entry errors. Without XBRL, electronic
documents, regardless of format (text, HTML, PDF, etc.), were essentially just digital versions of
paper reports. Humans could read the data, but computers could not automatically process it until the
recipient manually entered it in the appropriate format. XBRL changes that by encoding information
about what a particular data item means so that other computer programs can understand what to do
with it.

To illustrate, Figure 16-9 on page 505 shows how XBRL can annotate a number in a spreadsheet to
indicate that it represents sales for a particular time period, following U.S. GAAP and measured in
U.S. dollars. (The top portion of Figure 16-9 shows the spreadsheet that most users would see; the
XBRL code in the bottom portion is intended for use by software, although it can be viewed by
programmers, auditors, or anyone who needs or wants to see it.)