P1: IML/FFX P2: IML/FFX QC: IML/FFX T1: IML
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876 XBRL (EXTENSIBLEBUSINESSREPORTINGLANGUAGE): BUSINESSREPORTING WITHXMLLimitations of XBRL
Although XBRL provides a number of important bene-
fits, it also has limitations. First, it is important to note
that XBRL provides tags for conventional financial state-
ments and does not address other methods of displaying
financial data, such as formulas, graphs, and charts. In
fact, XBRL is not primarily designed for easy rendering
of information for human consumption—its primary ob-
jective is to enhance efficiency of data transfer and archiv-
ing. Many accounting professionals and users have sug-
gested that current financial statements do not fully live
up to users’ expectations because the conventional finan-
cial statement reporting format may not meet the needs
of users who prefer various types of multimedia formats
or multidimensional numerical and graphical presenta-
tions. XBRL does not provide a standardized format for
such displays, focusing instead on conventional financial
statement content. Second, XBRL does not currently ad-
dress the quality of information, for example whether
data coded in XBRL are reliable. A number of XBRL tax-
onomies are being developed, raising the possibility of
errors in selecting and applying XBRL taxonomies and
codes/tags. Also, information on the Web can be easily
created and revised, and its source can be disguised, rais-
ing questions about the trustworthiness of information
disseminated via the Internet, including information in
XBRL format. Third, XBRL currently views the accoun-
tant’s report as part and parcel of the financial statement
package as a whole. It does not provide for an assurance
report on an individual financial statement or an individ-
ual item in a financial statement, or on the internal con-
trols underlying the financial reports. We deal with these
issues in some depth in Boritz and No (2002).CONCLUSION
Many companies are attempting to disseminate financial
information over the Internet. They have set up Intranets,
connected the Intranets to the Internet, and have created
corporate Web sites to provide employees, investors, fi-
nancial analysts, and other users with the information
they need on a timely basis. However, data must often
be reentered or cut and pasted by users seeking to ana-
lyze it because there are no common, generally accepted
formats for describing business reporting data.
XBRL was created to help address these problems.
XBRL is a markup language for documents containingstructured financial information. It provides a standard-
ized method to prepare, publish, and exchange financial
reports and the information they contain without modifi-
cation. Thus, XBRL offers technology independence, full
interoperability, efficient preparation of financial state-
ments, and efficient extraction of financial information
for analysis purposes.APPENDIX A: CREATING AN
XBRL DOCUMENT
Here, we briefly describe how to create an XBRL docu-
ment and an XSLT style sheet. Please note that this exam-
ple is based on version 1.0 of XBRL. The XBRL specifica-
tion version 2.0 was publicly announced on Dec. 14, 2001.
However, at the time this article was prepared, the XBRL
taxonomy version 2.0 was not yet available. Version 2.0 is
significantly different from version 1.0, but the key con-
cepts described in this article are still applicable. Suppose
Waterloo Inc. wishes to prepare its financial statements
and distribute them to creditors, investors, analysts, and
regulatory parties over the Internet in XBRL format.
Table A1 shows the simple balance sheet of Waterloo Inc.
An XBRL document is a collection of elements and at-
tributes that describe financial information and data. The
XBRL document can be created by using a text editor
(a software application that enables a user to create and
modify text files), such as WordPad, or an XML editor or
an XBRL instance creation tool. The XBRL document for
the balance sheet of Waterloo Inc. is shown below.Table A1Balance SheetBalance Sheet
Waterloo Inc.
(Dollars in thousands) 2000 1999
Cash and cash equivalents 18,000 15,000
Accounts receivable, net 12,000 5,000
Total assets 30,000 20,000
Accounts payable 10,000 5,000
Common stock 20,000 15,000
Total liabilities and 30,000 20,000
stockholders’ equity01: <?xml version="1.0" encoding="utf-8"?>
02: <?xml-stylesheet type="text/xsl" href="Appendix.xsl"?>
03:
04: <group xmlns="http://www.xbrl.org/core/xbrl-2000-07-31"
05: xmlns:ci="http://www.xbrl.org/us/gaap/ci/2000-07-31"
06: schemaLocation="http://www.xbrl.org/us/gaap/ci/2000-07-31/us-gaap-ci-2000-07-
31.xsd"
07: period="2000-12-31"
08: scaleFactor="3"
09: precision="9"
10: type="statements"