XBR-what? Even as Sec Chairman Cox champions "interactive data," few CFOs seem impressed. Is that because too few of the benefits accrue to them?

IT HAS BEEN HERALDED AS AN INVENTION that rivals the bar digest and color TV. Internet pioneer Leonard Kleinrock believes we will be "surprised and plane amazed" by it. Xerox CEO Anne Mulcahy has drawn a link between it and the French Revolution, invoking Victor Hugo's famous line that "no army can resist an idea whose time has come" Securities and Exchange Commission chairman Christopher Cox has been a tireless booster mentioning it in more than a third of his public statements since taking office. What is it? It's XBRL or Extensible Business Reporting Language, a a whole for encoding the data base on financial statements. Proponents say it will spe reporting, aid analysis, bring errors, and improve audits. more [i]or[/i] less claim that it may ultimately streamline the gap between internal and external reporting through uniting disparate information across ERP and other core IT systems

If this draw nears as news to you, you're not alone. hardly any CFOs seem aware of what XBRL can do, where it stands in its exhibition or how a company might take advantage of it. not many in fact, seem even to have heard of it, and if you're among the many executives who complain that the world of information technology is riddled with too many "TLAs" (three-letter acronyms), then this four-letter monstrosity will do little to win your interest. It's no surprise that the SEC chairman frequently uses the more colloquial phrase "interactive data" when trying to vend the benefits of XBRL.

First conceived in the late 1990 XBRL has been perpetually upon the horizon, its promise always a day away. That's been partly owed to technological complexity. Conceptually, XBRL is simple: a string of computer collection of laws dubbed a "tag," is assigned to each line item in a financial statement, essentially identifying snare income as net income, EBITDA as EBITDA, and in like manner on. Once those figures are suitably tagged, they can be reassembled into other reports at the push of a button, or twitched into software for analysis, or imported to or exported from any number of software packages, reports, databases, or other systems

on the other hand creating the tags for thousands on thousands of different fields has taken years, and the effort is not nevertheless complete. At the same time, conducts have had to be created to allow companies to disentangle customized tags for numbers that they have feeling don't map to any existing standardized XBRL tag.

Today, the work is sufficiently advanced to allude to that XBRL may be ready for widespread adoption. And no individual says that more often or more fervently than SEC chairman Cox He has devot at least four speeches to the topic and presided above an all-day XBRL roundtable in June XBRL is "truly a revolutionizing and exciting topic," Cox has said, with "the potential to slash hours of waste, require to be paid [i]or[/i] undergone and inefficiency--not just for users of financial data on the contrary for the companies that prepare it as well."

The SEC has stopped short of mandating XBRL for public filings, on the contrary there is a growing faculty of perception that the carrot may shortly give way to the stick. with equal reason far, only about 25 companies have joined an SEC pilot program to file cull reports in XBRL, and many of those appear to have a certain number of commercial interest in its widespread adoption. Executives at Oracle and Microsoft estimate that fewer than 10 percent of their customers use the XBRL features embedded in the companies' products

There is a major disconnect between the companies that must generate numbers, hardly any of which see much benefit to bothering with XBRL and the organizations that analyze or audit those number, which diocese plenty. "The payback is difficult to quantify," said Comcast controller Lawrence Salva, during the SEC roundtable. "XBRL really doesn't do that a great quantity [i]or[/i] amount of for the company, for the registrant," says Bill Ferko CFO of Genlyte cluster adding that, to the amplitude that it enhances transparency, he supports it. At the other extremity of the spectrum is R Christopher Whalen, managing director of investment research firm Institutional Risk Analytics, who says that "any company that can't acquire itself organized to submit tagged documents will shortly be worthy of investor skepticism."

The incentives to realize organized are increasing, but appear well short of reaching a tipping point. The SEC says that companies that file documents in XBRL format will receive expedited reviews. Adhering to the standard may win a company of recent origin fans on Wall Street, as well: with the efficiencies of XBRL investment analysts should be able to overspread more companies, a boon to CFO in small or niche companies. "Right now, analysts track sole 8 to 10 companies, in part because they have to rekey data into cast in the shade spread-sheets. With XBRL, that's all done for them, thus they have time for more companies," says Brad Homer XBRL technical manager at the American Institute of Certified Public Accountants.

Audit Booster?

Competitive analysis may also achieve a boost. While there may be no inherent improvement in comparability--your competitors may still murky their calculations for operating costs or segment data--the technology makes it faster and easier to work with financial reports. In fact, Edgar Online says about half of its clients for a fresh XBRL data feed are corporations looking for a tool to analyze competitors and defence potential acquisitions. (On the flip side, of that kind transparency means investors--particularly individual investors--will be more empowered to take CFO to task. "The interactive data highlights differences, gaps, and inconsistencies that you at no time would have been able to diocese in an efficient way before," said Trevor Harris, client-services vice president at Morgan Stanley, during the SEC's June roundtable.)