The global revolution of managing business information

XBRL promises to revolutionize the way financial information is created, shared, consumed, and analyzed. The XBRL standard in conjunction with global financial reporting standards continue to converge, giving the world a first glimpse into the realization of a universal implementation of XBRL and offering a new era of information access, interactivity and interoperability.

The United States and the Securities and Exchange Commission continue to play catch-up in a world where XBRL is already a reality. India and China use XBRL to optimize their financial reporting processes, while Spanish and Dutch XBRL initiatives continue to thrive. Regionally, Europe remains among the world leaders in the implementation of XBRL technologies that have given various jurisdictions greater insight into the future application requirements needed to succeed in a world of XBRL compliance. Multi-listed companies in general continue to deal with the complexities of managing cross-jurisdictional compliance requirements. XBRL’s flexibility enables rapid and seamless cross-jurisdictional reporting, incorporating International Financial Reporting Standards and Basel II requirements. XBRL initiatives are underway around the world and there is no stopping the transformation of global business reporting.

Financial information tagged in XBRL opens the door to a new world of transparency, interoperability, and consistency. The new era of business reporting demands the incorporation of advanced applications such as JustSystems’ xfy, enabling the synchronization of XBRL with non-XBRL information.

The ability to manage and represent business information has become an extremely daunting task. We all know that information within organizations is piling up at an exponential rate. The unfortunate thing is that much of this critical business information is becoming useless, as there is really no way to find and compare the information you need without reading through every line, paragraph, row, and column. Static information has no internal definitions or context.

Static information can create delay and risk in the execution of regulatory filings, financial reporting, and the consumption and analysis of financial information by the investment community and other stakeholders. XBRL transforms financial information from static, awkward and one-dimensional to a dynamic, fluid, and multidimensional view of business. Imagine companies no longer having to invest in time-consuming methods of re-keying financial data and managing the workflow of sharing collaborative information. Envision a world where complex and obfuscated financial information that allowed companies like MCI WorldCom and Enron to fly under the radar is now replaced by fully transparent and comparable financial data. Companies are no longer able to hide behind walls of static information – or even clever footnotes disclaiming the meaning of the financial data investors and other stakeholders rely upon.

How, then, will accounting firms, corporations, and regulatory agencies embrace the mandate of new XBRL technology? Companies concerned with preparedness must research the tools required to file and produce XBRL documents for the submission to global regulatory bodies. Many organizations are eager to adapt, but lack a proper plan of action – or even a context for understanding the role of XBRL. XBRL will soon become a ubiquitous part of business reporting. The question is, are you ready?

What is XBRL and why does it matter?

XBRL (Extensible Business Reporting Language) is an XML based open standard business reporting language. XBRL was first conceived in 1998 as a way to use XML in relation to the electronic reporting of financial information. The way in which your company files with regulators in your jurisdiction, analyzes financial data, and manages disparate XML-based architectures must adapt due to the ever changing global XBRL compliance rules and regulations. The time for action is now.

The way information is currently created, managed, consumed, and analyzed will change dramatically. The days of producing static documents will soon be a thing of the past. PDF, Word, Excel, and HTML documents are largely static and monolithic textual information. XBRL makes static documents dynamic by tagging or defining both numerical and textual information within a document. Financial statements coded in XBRL have internal tags defining specific terms such as gross profit, net asset value, and total revenue, to name a few. Textual information can also be tagged giving it meaning and the ability to be compared to documents defined in the same way. Not only are you be able to compare companies within local markets, you have the power to compare intra-sector companies across jurisdictions. Previously, it would be very difficult to make sense of the performance of a company in China versus one in Japan – which is a realistic need in today’s global markets.

Real world XBRL problems and solutions

XBRL will create problems that demand real solutions for regulatory filers, accountants, securities lawyers, financial analysts, investors, and corporations interested in integrating and implementing XBRL processes. The implementation of the right solution dramatically impacts each area of business allowing them to survive and thrive in the world of XBRL compliance.

One of the key enabling technologies for XBRL-based applications and processes is JustSystems’ xfy (pronounced ‘x-fie’) product. xfy is a powerful document-based composite application framework that allows organizations to rapidly unify content and data in a single dynamic document. JustSystems’ xfy enables XBRL-centric documents and applications that allow organizations to leverage and meet the new demands of XBRL-based processes.

Problems facing regulatory filers, accounting firms, and securities lawyers

The XBRL mandate will forever change the way you manage and submit financial information. Depending on your jurisdiction, you will be required to submit XBRL tagged financials to your regulatory body.

XBRL directly impacts the way you currently prepare financial statements. The introduction and finalization of global accounting taxonomies will force you to learn how to tag financial data within a predefined semantic structure.

In the near future, securities lawyers will have to tag textual information as part of submissions. The future of complete XBRL coded regulatory documents will open up a whole new world of near real-time financial comparisons incorporating both numerical and textual forms of data.

Solution: xfy Regulatory Filing Solution

JustSystems’ xfy Regulatory Filing Solution is designed for companies that are required to submit XBRL-tagged financials to XBRL-enabled regulatory bodies. The xfy Regulatory Filing Solution provides a dynamic document interface, allowing any organization to create jurisdictional-specific regulatory documents such as those for the US Securities and Exchange Commission and the Financial Services Agency of the Japanese Government.

Accountants, auditors, lawyers, CFOs, CEOs, and directors are currently filing documents in either html (web pages) or ASCII (plain text). The requirement to file in XBRL will introduce significant new requirements for filing. The xfy Regulatory Filing Solution is extremely user friendly, as the XBRL is taken care of behind the scenes. The user interface displays only the regulatory documents. The XBRL coding is done for you. This enables the user to focus on the content, not the technology.

Real-time, dynamic and up-to-date Information – the document is the application

Do not confuse this application as simply a publishing platform – far from it! The documents within the xfy Regulatory Filing Solution are dynamic in every way. The xfy core platform behind the Regulatory Filing Solution enables all documents to pull real-time financial information from external ERP systems. The xfy Regulatory Filing Solution updates any document changes or requirements as mandated by the regulatory body. News bulletins, document submission fee rates, and related news disseminations relevant to the document being submitted are also updated and displayed in real-time. This ensures that all of the pertinent information required for filing is available dynamically in real-time.

The xfy Regulatory Filing Solution provides a collaborative workflow capability that allows filing contributors to work together on the preparation of filing documents, while maintaining an audit trail, and managing the document lifecycle from start to finish. xfy governance capabilities ensure consistent security policies are enforced and only users with appropriate permissions can access and interact with regulatory filings. Lawyers for example would be unable to alter any financial information or footnotes as this is in the realm of the accountants, CFOs, and auditors. This process guarantees a secure workflow that produces a more accurate filing for submission.

The xfy Regulatory Filing Solution allows you to generate pure XBRL documents (aka XBRL instances) for submission, while also providing the flexibility to generate PDF, Word, and HTML documents on the fly with xfy Regulatory Filing Solution’s XHTML document output feature. Other existing XBRL applications do not allow you to view your work in a clear and/or readable way. Pure XBRL is a complex array of code not meant for human consumption. Once the document is completed and all digital signatures have been inserted, simply click the submit button and the xfy Regulatory Filing Solution connects and submits your filing and logs the successful acceptance of the document within the xfy filer interface.

Problems facing financial analysts and investors

The market value of basic quantitative financial information is dramatically reduced due to the open availability of XBRL information. Analysts are forced to provide a more in-depth interpretation of financial information to stay competitive.

The ways in which analysts and investors consume and interpret information no longer require data aggregation channels. XBRL provides you with a dynamic information flow of financial information. The data is pulled from the source XBRL document originally filed with the regulatory body.

New tools are required to stay competitive in a world where XBRL-based financial information is readily available.

Solution: xfy Financial Analysis Solution

JustSystems’ xfy Financial Analysis Solution is designed for the connected enterprise enabling content distribution, analysis, review, and collaboration across the organization over a secure enterprise-class server designed especially for financial and investment research firms and banks focused in equity, derivatives, trading, credit, mortgage, and investment banking. With XBRL content soon to be the ubiquitous standard within business reporting, the financial analysts, researchers, bankers, loan officers, mortgage brokers, and traders face an insurmountable flow of new XBRL-coded financial information.

The xfy Financial Analysis Solution is unique from any other commercial offerings. This solution provides an enterprise level connected server side push and delivery of dynamic financial content. Think of the xfy Financial Analysis Solution as your window to the world that presents custom views and comparisons of any financial information relevant to your unique information requirements. Imagine being able to compare with the click of a button not only companies within the same market, but complicated intra-sector analysis pulling together global market comparisons. What used to take days, will now only take minutes. xfy’s XBRL Analysis Engine has the coded efficiency to present you with the real-time information throughput and comparisons needed to compete in today’s high-speed financial markets.

The xfy Financial Analysis Solution can also automate the credit application process by dynamically managing and delivering automated prompts throughout the credit application process. For example, once the application is complete, xfy references and compares your credit profile to what is acceptable and then moves on to the next phase of the process. The solution can then accept and initiate stages in the credit process never before possible without the interaction of a human beings. This system helps improve the overall efficiency of the application process by streamlining redundant and time consuming human activities and interactions.

The xfy Financial Analysis Solution’s built-in governance layer also presents only the pertinent information to specific and/or authorized users. By bringing life to any human-centric document process, the xfy Financial Analysis Solution enables your organization to increase revenues by providing clients with real-time information, comparisons, and financial interpretations with more accuracy, consistently, and speed.

Problems facing companies required to integrate disparate repositories

All companies face the challenge of managing different kinds of data. With the introduction of XBRL content, accounting firms, companies, and organizations are looking to integrate XBRL information within their current data repositories.

The problem is the information within organizations is becoming inaccessible due to the way the data has been encoded. Referencing, annotating, and comparing various data repositories is a problem that is truly affecting the performance of internal and external business operations. New financial reporting requirements based on XBRL tagged data are forcing companies to rethink how they will manage information in the future. A solution is needed to provide a universal platform designed to interpret all forms of data.

Solution: xfy Document Integration Solution

The xfy Document Integration Solution is designed for companies that are required to manage and link various types of XML-based architectures. Companies are faced with the challenge of linking their current XML data with XBRL-based taxonomies. Synchronizing various forms of information is becoming a requirement within competitive business environments. Organizations have multiple repositories that contain various types of business information that need to be linked together into one document. The xfy Document Integration Solution brings together all forms of business information, forever changing the way information is currently mapped and assimilated.

The xfy Document Integration Solution is the world’s first universal XML integration tool that gives your organization the ability to link your current XML architecture with any other. The xfy Document Integration Solution delivers a user friendly, document-centric application that behind the scenes manages and interprets any XML architecture. This enables the user to view, compare, annotate, and analyze any information pulled from disparate repositories.

For example, if you worked in a publically traded company that was required to do a merge and analysis of information from two separate data repositories within the areas of chemical engineering, and mathematical modeling, you would find the information to be inherently different and nearly impossible to compare. The xfy Document Integration Solution bridges the gap between the disparate types of information giving you the tools to look at information on a level playing field. Think of the xfy Document Integration Solution as the world’s first XML Rosetta Stone that enables the seamless interaction of any XML vocabulary. Example XML variants include DITA, XBRL, SVG, ChemML, and MathML.

Conclusion: What does XBRL mean for accounting firms and corporations?

Organizations must recognize that XBRL is real – and soon, it won’t be optional. The ever evolving XBRL world is calling for better tools to manage the creation and flow of XBRL information. Organizations failing to make early investments in the tools and practices required for XBRL filing will be unprepared. Take some time and understand the importance of XBRL to you and your company’s future.

Once XBRL is implemented, companies reduce costs for managing information flow. Productivity increases due to more time being focused on the production of quality information instead of the manipulation and re-keying of content. Data quality and the validity of information are improved due the validation process built in the XBRL language. The sharing of data is fluid across any application. Data interoperability problems will be a long distant memory. XBRL will transform the future of business reporting.