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The XBRL Advantage

September 20, 2009

XBRL is an emerging finance technology for sharing business and financial information between software applications both at the server level and end user level. But what makes XBRL so unique as a way of sharing information?

XBRL could be described as the computer language for electronic communication of internal and external business and financial information. XBRL is unique because it works across technology platforms and is application neutral. XBRL can be imported and exported by a variety of centralized and end user software applications including the ubiquitous Microsoft Office applications. XBRL is also easily sharable across the internet.

XBRL replaces manual operations with automation and is applicable to business information, business rules, formulas, controls, processes and resources. XBRL is designed to automate all of the automatable information and processes and then give it to end users in near real-time so that humans can add greater value by thinking about the important issues, strategies and decisions to be made without wasting time on manual analytics. In addition, XBRL will increase transparency for business and financial reporting information thereby fostering trust among businesses, investors, regulators and the public.

Former SEC Chairman Christopher Cox expressed the vision for XBRL this way: “What we need is something that will give individuals faster access to better information that they can easily use and understand. We need to make searches for information easier. It should be easy to call up information about any company you choose. You should be able to download it and use it in the personal software of your choice. And you then should be able to easily analyze and compare the data with the same information from other companies. We want to make the numbers derived from financial statements vastly more accurate. And we want to allow companies to communicate with investors on a constant basis.”

– Speech by SEC Chairman Christopher Cox: The Interactive Data Revolution: Improved Disclosure, American Enterprise Institute, Washington, DC, May 30, 2006

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