XBRL

Neal Hannon, Editor XBRL GL: The General

Gets Its Groove | BY NEAL J. HANNON

Each year, Today publishes a list of the number. Analysis of the how and why for a particular number on a top 100 technology products for accounting. Although subsequent financial report be- the list contains several broad categories of software comes an exercise of going back to the original software application that helps businesses get their work done, the fact that and hoping that enough identifying so many different choices are available is evidence that information still exists inside the application. Accounting applica- the accounting market is very diverse, robust, and tions tend to keep supporting data in ways that are unique to each ap- fundamentally flawed. See www. its that were hand-written into the plication, complicating both the webcpa.com/article.cfm?articleid= books of the merchants of Venice. business reporting process and sub- 9747 for the 2005 article. Modern accounting systems record sequent internal control and Modern accounting was born transactions into relational databases routines. centuries ago when the only method that smooth the way for quick re- of recording business transactions trieval of the data for further process- Introducing XBRL GL 2005 was pen on paper. Fourteenth cen- ing. But this improvement doesn’t Fortunately, a new method of repre- tury Italian merchants are credited address the problem of “naked” data senting what is found in the data- with developing double-entry book- in our accounting systems. bases of accounting and operational keeping, the system of recording Naked data occurs when an ac- systems that keeps the exact content each business transaction twice counting application strips away or while allowing “fully clothed” data to that’s still used today. were fails to collect the supporting infor- pass outside the system is finally heavy books that recorded all signif- mation from a business transaction here. Currently under review as a icant entries of a business. At the that could lead to a richer, fuller ex- public working draft, XBRL GL 2005 close of business, the ledgers were planation of that transaction. Con- is a series of tags organized in a summarized into a “general” ledger, sider that most modern accounting modular set (or taxonomy). Accord- and financial statements were applications allow for documenta- ing to the XBRL International web- prepared—not very different from tion of transactions natively within site (www..org), XBRL GL 2005 what’s done today. the applications. Once pulled out- was developed to provide a stan- A quick peek under the covers of side the application by query or by dardized format for representing the packages will a report writer, however, the data is data fields found in transactional re- reveal that most are recording little typically stripped of all supporting ports and accounting and opera- more than the same debits and cred- information and becomes just a tional systems that allows organiza-

September 2005 | STRATEGIC FINANCE 57

tions to tag journal entries, - audit trail and eases the reuse of the porting, and analysis tool for the ing master files, and historical status data in modern business reporting desktop, matching the needs of reports in XBRL. The modular set models, such as dashboard business HUD. The design criteria for the consists of the COR (Core), the BUS process monitoring systems. HUD project include: (Advanced Business Concepts), ● Because of its ability to univer- ● Link downstream information MUC (Multicurrency), USK (con- sally represent general ledger entries and reporting requirements with cepts for the U.S. and U.K.), and from various international applica- transaction data; TAF (tax audit file) modules. See tions, XBRL GL can act as a natural ● Accept standard information to www.xbrl.org/int/gl/2005-07-12/ middleware for disparate application and from other internal, govern- gl-2005-07-12.htm for a more de- data to be fed naturally into a com- ment, or private-sector sources; tailed description. mon program. For example, the ● Provide “one-time” data entry; According to the XBRL Interna- Japanese company Wacoal (see and tional’s GL working group, XBRL GL “Breathing New Life into Old Sys- ● Be modular in design and built is “based on the model of a sophisti- tems,” Strategic Finance,March with reusability as an objective. cated accounting system’s General 2004) utilized XBRL GL as the Given these criteria, XBRL GL is a Ledger journal history file, into method for feeding data from sever- clear favorite to fill the need at al different legacy systems into HUD. XBRL GL has pioneered the Oracle Financials. development of standard methods of DID YOU KNOW? XBRL GL doesn’t ● Companies that need to con- recording, storing, sharing, and re- require a company to change the way it solidate data from different coun- porting accounting-significant trans- represents data internally, but it provides tries may find that not everyone actional data in an open-source a guide to help developers consider what stores required information exactly environment. needs to be captured and exchanged. the same way or in the same place. Why do standards make a differ- “Flick a switch” on an external reporting XBRL GL tagged data can work with ence? They improve communication tool, and every system will look similar to the data regardless of where the dis- at all levels, especially between dif- the builders of reporting tools and con- parate information is stored and ferent computer applications. The solidation tools and to any other software easily import the data into a new sharing of business reporting infor- builders who need to use the data. general ledger. mation between systems both inside Source: XBRL GL Working Group, “XBRL GL: ● XBRL GL has been designed to and outside an organization is What’s in it For Me?” act as both an audit tool, with the greatly simplified by the use of a ability to represent information as common translator such as XBRL which all of the detail from all of the originally stored in the system, and GL. IMA has been and will continue sub-ledgers may flow. XBRL GL is a as a data exchange format, with stan- to be a strong advocate for XBRL generic representation of the docu- dard lists of terms for the most im- GL as an enabler to enterprise busi- ments, parties, resources, events, and portant interchange concepts to pro- ness reporting and will be hosting other details that start at the transac- mote consistency and automated a webinar on this topic in the fall. tion level and flow in full detail or machine consumption. Details will be announced next summary to the Ledger.” At the July 2005 XBRL-US con- month. ■ XBRL GL 2005 is the most sig- sortium meeting in Arlington, Va., nificant improvement to the gener- Gianluca Garbellotto, XBRL busi- Neal Hannon is an accounting lectur- al ledger since manual bookkeep- ness manager for DynAccSys, LLC, er for the Barney School of Business at ing moved to the database model. gave a presentation about a pro- the University of Hartford. Author of Why? posed use of XBRL GL within the two books and numerous articles, he is ● With XBRL GL, significant federal government’s Department of the IMA’s representative to the XBRL business reporting data is enriched Housing and Urban Development International consortium. Hannon is with meta data or information about (HUD). The DynAccSys demo a former member of the XBRL-US the data that is never separated from showcased how XBRL GL output steering committee and former chair the original transaction. This facili- could be consumed and analyzed of XBRL International’s Education tates the creation of an automated with Business Objects’ query, re- Committee.

58 STRATEGIC FINANCE I September 2005