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Companies large and small are frequently called on to present financial reports to regulatory agencies, investors and others. Although it's been standard practice to mandate the content of these reports, the formats vary widely. You'll find Excel spreadsheets, Word documents, PDF files, comma-delimited files and even hard copy. XBRL (Extensible Business Reporting Language) was developed to create a common format. By adopting a single language, businesses can compose reports that are more accurate, easier to produce and clearly understood by all recipients.

The XBRL standard is expected to revolutionize the production and use of business reports across industries. With standardized report formatting, a number of improvements could be realized, including increased accuracy, better readability and reduced overhead associated with report production.

XBRL International governs XBRL use. With more than 450 members, it develops, supports and promotes the worldwide use of XBRL. Two federal agencies are championing XBRL adoption. The SEC began a pilot program encouraging the voluntary use of XBRL; 24 corporate participants are on board. The FFIEC has deployed a CDR that accepts call reports from domestic banks using XBRL-formatted reports.

XBRL use has been widely accepted by both the corporate and regulatory communities. Through both voluntary and mandated use, the standard will improve under the leadership of organizations such as XBRL International. Although growing pains will still be evident, the consensus of many regulatory agencies, and their government sponsors, will drive XBRL acceptance.

Agency Support

Introduced in 2000, XBRL is gaining momentum: The SEC (Securities and Exchange Commission) has put its weight behind XBRL, launching a pilot program for companies to submit financial reports in the format. Some big U.S. companies--including Bristol-Meyers Squibb, Dow Chemical, Ford Motor, General Electric, Microsoft, PepsiCo, Pfizer, 3M and Xerox--have signed on to the program. Another U.S. agency pushing XBRL toward critical mass is the FFIEC (Federal Financial Institutions Examination Council), which recently mandated the use of XBRL-formatted call reports submitted through its data repository system.

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