Hailed as a breakthrough that would automate many financial
reporting functions, XBRL (eXtensible Business Reporting Language)
is a form of the XML family of computer
languages that some predicted would revolutionise financial
reporting and accounting.
It works by creating tags for information so that data entered
into one system as, for example, the earnings before tax would be
recognised by a second system as that figure rather than, for
example, the figure for losses. It uses standardised meta-data to
tag information.
The FSA, however, has said that it will stick with ordinary XML
when it makes electronic reporting compulsory for companies.
"In order to promote the efficient and effective use of
information, the FSA has committed to introducing a common
reporting format across all of its regulatory reporting systems,"
said an FSA statement. "Existing FSA systems have been developed in
the standard XML format and it is therefore a logical step to
introduce a mandatory electronic reporting system that builds upon
and further develops the existing technical infrastructure that
supports standard XML based reporting."
XBRL was hailed earlier this decade as a vital component of the
coming 'semantic web'. The semantic web is the name for a set of
technologies proponents believe will make up the next generation of
web technology. It will involve increasing amounts of automation of
data processing which will enable computers to conduct ever-more
complex procedures without human intervention.
Using XBRL would allow businesses to communicate a raft of
information about business and financial performance to the FSA in
a standard way, but the FSA says that there is not enough expertise
in the technology yet for it to be adopted.
"The FSA does not believe that there is sufficient XBRL
experience within the UK currently to develop this system without
incurring additional cost and risk," it said. "Feedback from
regulated firms suggests that the availability of XBRL software
support and industry experience within the UK, whilst on the
increase, is still relatively low."
Some software and web industry observers are predicting that the
semantic web will still happen, and that it will become the next
internet phenomenon after the user-generated content and social
networking boom that became known as Web 2.0.
