Business reporting encompasses a wide range of information, from financial statements and key performance indicators to written analysis, graphics, charts and pictures and even the spoken word.
Using XBRL, organizations can communicate a vast range of business performance information, from complete annual financial reports for public consumption to daily key performance indicators for management. For that matter, a user could track the progress of the company sports teams in XBRL— but typically, use is focused on business performance rather than sporting ability. It’s important to note that XBRL is all about reporting activity rather than the activity itself. There are many other XML (eXtensible Markup Language) dialects that have been developed for sharing details of business transactions, but no other standards for communicating performance.
For financial reporting, where the accounting policies, management notes and other related definitions are a vital component of a full understanding of the information conveyed, XBRL provides a better way to reach that understanding. Recent academic research in this field provides some empirical support for what might seem obvious. If the user of corporate information can link to a definition instead of wading through dozens or hundreds of pages of supporting notes to the accounts, then he or she has a better chance of getting the message across. See the University of Washington study on the analysis of stock options with and without XBRL.
This characteristic of digital business reporting, placing emphasis on information and reducing the importance of presentation, is one of the keys to understanding the right ways to develop XBRL reports for external consumption. KPMG firms can assist clients in this area.
It is extremely important to understand that reporting in XBRL does not require companies to disclose more information or different information than they did when using traditional media. The XBRL technology is merely a facilitator. Organizations decide what they are going to disclose (or use what they already disclose on paper) and systematize the translation of this information into XBRL.
Again, it is expected that the main uses of XBRL will be in the business reporting area — communicating different types of performance information for analysis — rather than transactional information, communicating the details of individual business actions.