XBRL is supposed to facilitate the electronic exchange of financial information.

Explain what XBRL is and how it would help with the exchange of information

An Introduction to XBRL Extensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data which is revolutionising business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. XBRL is a member of the family of languages based on XML (Extensible Markup Language), is becoming a standard for the electronic exchange of data between businesses on the Internet. Using XML, identifying tags are attached to items of data so they can be processed efficiently by computer software. Therefore, XML has gained wide acceptance throughout the information technology community as a primary method to provide efficient data communication over the Internet. As an XML convention, XBRL is easily extensible and can be used across platforms, software formats, and/or technologies. These XBRL characteristics allow the complex, ever-changing financial reporting process to become more efficient, effective and; accordingly, economical. As a result, it is becoming increasingly popular in public financial reporting. In wider terms, XBRL is a technology by which directed searches and simultaneous presentation of related financial statement facilitate, and also footnote information could potentially help financial statements users. The use of search-facilitating technology depletes differences in nonprofessional investors financial performance judgments and investment decisions created by recognition versus disclosure; accordingly, it could not be wrong to conclude that search-facilitating technology broadly improves the transparency of firm s financial information. Financial statements in XBRL format bring users of financial reports the opportunity that provides them with directly search for relevant information regardless of the information s location and to conveniently compare related information among different companies. All in all, XBRL can reduce unreliability of financial information for firms and help them to minimize the minus effect of nondeterministic decisions based upon financial statements information. XBRL is being developed by an international non-profit consortium of approximately 450 major companies, organisations and government agencies. It is an open standard, free of licence fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world.

The Effects of XBRL on Financial Transparency XBRL is not a software application; also it is not a new accounting standard. XBRL is a so-called semantic data format additional to an open and free electronic language providing each data element with a tag that identifies it unambiguously.

The data tags, prepared by XBRL format, provide information about the structure of financial data that allows software applications, such as search engines, parsers and so forth, to more effectively process the data. As a case in point, software developed to search for these predefined data tags allows users to extract and simultaneously view all similarly coded information, notwithstanding where the information is presented in a firm s financial statements. This search capability has the potential to contribute to increase the transparency of different accounting treatments, decrease users costs of processing information, and perform as a decision aid for users by facilitating the providing related information. The implementation of search-facilitating technology has two implications for managers choice of recognition versus disclosure. First and foremost, by facilitating comparisons across companies that differ in their choice of recognition versus disclosure, search- facilitating technology makes managers choice of recognition versus disclosure more transparent to users. Second, searchfacilitating technology allows users to conveniently access information disclosed in the footnotes and compare and integrate this information with related information recognized on the face of the financial statements. For both reasons, search-facilitating technology enables financial statement users to make more informed decisions based upon the information contained in the report, regardless of where it is presented.

A Simple Explanation The idea behind XBRL, Extensible Business Reporting Language, is simple. Instead of treating financial information as a block of text - as in a standard internet page or a printed document - it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag. The introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data "intelligently": they can recognise the information in a XBRL document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information. Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyse data much more rapidly and efficiently if it is in XBRL format. XBRL can handle data in different languages and accounting standards. It can flexibly be adapted to meet different requirements and uses. Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software.

Benefits and Beneficiaries XBRL offers major benefits at all stages of business reporting and analysis. The benefits are seen in automation, cost saving, faster, more reliable and more accurate handling of data, improved analysis and in better quality of information and decision-making. The use of XBRL does not imply an enforced standardisation of financial reporting. On the contrary, the language is a flexible one which is intended to support all current aspects of reporting in different countries and industries. Its extensible nature means that it can be adjusted to meet particular business requirements, even at the individual organisation level. XBRL enables producers and consumers of financial data to switch resources away from costly manual processes, typically involving time-consuming comparison, assembly and re-entry of data. They are able to concentrate effort on analysis, aided by software which can validate and manipulate XBRL information. As just one example, searches for particular information which might in the past have taken hours can be completed with XBRL in a fraction of a second. Those who stand to benefit include all who collect business data, including governments, regulators, economic agencies, stock exchanges, financial information companies and the like, and those who produce or use it, including accountants, auditors, company managers, financial analysts, investors and creditors. Among those who can take advantage of XBRL include accountancy software vendors, the financial services industry, investor relations companies and the information technology industry.

Conclusion We find that when stock option accounting varies between two firms, search technology contributes users to both acquire and integrate relevant information. Participants who used XBRL-facilitating technology were more likely to acquire footnote information, and also they were more likely to integrate the footnote information with related information on the face of the income statement when making judgments and decisions. When compared to participants who did not use searchfacilitating technology, differences in investment decisions were detected. It can be seen that the implementation of XBRL improves the transparency of a firm s financial statement information and managers choices for reporting that information. The XBRL and Business section explains how particular types of organisation can benefit from XBRL. The use of XBRL does not imply an enforced standardisation of financial reporting. On the contrary, the language is a flexible one which is intended to support all current aspects of reporting in different countries and industries. Its extensible nature means that it can be adjusted to meet particular business requirements, even at the individual organisation level.