Thursday 4 August 2011

Why was XBRL invented?

"Progress isn't made by early risers. It's made by lazy men trying to find easier ways of doing something" - The science fiction writer, Robert Heinlein

Before the advent of XBRL, comparative analysis would require the mass re-keying of data. As a man who once did this for a living, it's a enough to make you want to roll over and go back to sleep! Not only is it laborious, it's error prone, expensive (we did like to get paid!) and time-consuming (leading to long lags between publication of company financial data and it appearing on a screen near you). The Architects of XBRL were trying to solve these problems and also eliminate one further stage, invisible to user, in the production of accounting data - the transfer of the data from the accounting system to the prettified published accounts. Indeed in the science fiction world of XBRL, the numbers in the back office accounting system may not have been keyed in at all but arrive in the form of an XBRL enabled invoice.

So as ever, it's about saving time and money with the added advantage of being able to have greater confidence in data which has been untouched by error prone human hands.

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