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XBRL: Drag-to-Tag?XBRL: Drag-to-Tag?
What’s holding XBRL back?
2 Min Read
Ventana Research believes metadata tagging holds great promise for the future of business intelligence and business process automation. So why is it taking so long for the Extensible Business Reporting Language (XBRL) to gain traction in the marketplace? We propose a number of issues that are holding XBRL back from reaching its potential. Ventana Research recommends that organizations unfamiliar with XBRL take advantage of new tagging tools to raise their understanding and perhaps practical use of this useful metadata taxonomy focused on financial analysis and transparency.
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XBRL sounds like a no-brainer: Tag all kinds of useful business information (e.g. financial reports) with Extensible Markup Language (XML) tags based on an agreed standard taxonomy and then leverage the heck out of it. XBRL tagged data can be exposed as a Web service so financial analysts can compare like with like, aiding business and market transparency so that internal or peer-to-peer benchmarking efforts can be made easier.
Larger corporations have the potential to re-architect and better automate their consolidation processes or intercompany accounting and expose lots of useful information locked away in proprietary systems for internal analysis. But despite all this, the evangelism of Microsoft, the NASDAQ and others, and the increasing interest from regulatory bodies around the world in mandating XBRL output for various types of statutory reporting, XBRL hasn’t taken off.
It’s not as if the ERP vendors haven’t done their bit. XBRL output has been available for some years now and not just for use by large organizations using expensive top-tier ERP systems. Microsoft Business Solutions Navision, a leading mid-tier ERP vendor, was one of the first to offer XBRL as an output format for financial reports. So for once we can’t blame ERP vendors for not keeping up with things, even though it is an effort for them to keep up with what is an evolving standard. Instead, there are at least three issues holding XBRL back:
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