Inline XBRL - An Introduction

From MIKE2.0 Methodology

Inline XBRL

Inline XBRL is a new module in the XBRL family of specifications that build on XBRL 2.1. This is an open specification, available royalty free to anyone to use as they choose. The governance and management of the specification is handled by the XBRL International consortium, a global not-for-profit.

What is Inline XBRL? Inline XBRL provides a formal specification that governs the production of web pages in HTML or xHTML that incorporate XBRL tagging instructions around specific facts commingled inside the HTML markup. The specification allows the unambiguous and standardised transform of Inline XBRL (often shortened to iXBRL) into XBRL. The specification was invented by CoreFiling, a leading XBRL vendor, and donated to the XBRL International consortium, where CoreFiling led the standardisation process, in collaboration with a number of other XBRL experts. The XBRL consortium paid XML maven Evan Lenz to produce an open source iXBRL processor. There are commercial versions available from at least one vendor.

Inline XBRL example

For those wondering, here's a trivial Inline XBRL snippet:

<ix:nonFraction scale="3" name="uk-gaap-pt:TurnoverGrossOperatingRevenue" contextRef="yearend2008" unitRef="GBP" decimals="-3" format="ixt:numcommadot">12,818</ix:nonFraction>

The rest of the document contains references to the relevant taxonomies, context identifier lookups, etc. Browsers ignore everything in the "ix" prefixed namespace and only render the data (in this case 12,500 which is converted into 12,500,000 when processed owing to the scale attribute).

Initial Adoption

Inline XBRL has already been adopted in the UK. It is being used as a central part of the HM. Revenue & Customs (HMRC) mandate that requires UK companies to provide statutory accounts in iXBRL format, replacing the paper arrangements that have existed to date. Nearly 2 million companies will file their accounts to the UK's tax regulator in this format starting in April 2011. Companies will be able to file their accounts with the companies registrar (Companies House) from the summer of 2010. A range of other regulators are closely examining the iXBRL specifications and many are expected to follow suit.

Why use iXBRL?

Much performance information produced by organisations is prepared as a report, containing a range of formatting decisions that are unique to that document. Reports can contain both text and numeric information and the layout and look-and-feel often convey meaning, at least in the eyes of the preparer. The financial statement is the prototypical report, and is subject to significant scrutiny by boards, auditors, investors and creditors, but there are a vast array of performance reports with similar characteristics.

XBRL, originally developed between 1999 and 2002, draws from the XML principles of keeping data and presentation layers separate. However, to produce a rendering of an XBRL document is extremely complex and will always differ somewhat from the presentation decisions of the preparer. In short, the use of the data-centric XBRL standard, in environments in which presentation decisions of accountants and business experts remain important (ie: not forms), involves an important compromise.

For example, since mid-2009, the US Securities and Exchange Commission (SEC) commenced a three year introduction to the mandatory use of XBRL (not, as yet, Inline XBRL) for US listed companies. The SEC uses its own proprietary rendering engine to convert XBRL documents into financial reports. The results of this rendering cause considerable concern for many of the enterprises that file.

Inline XBRL overcomes this issue, allowing the preparer to completely control the look and feel of the report. Recipient users can read the document in a browser, with the rendering intended by the author. Recipient systems can consume the structured content and convert it into XBRL for downstream processing and analysis.

Another aspect of Inline XBRL is that it allows the incremental application of tagging to structured and semi-structured content. HMRC, for example, at this stage requires that only a subset of concepts contained in the UK GAAP and UK-IFRS taxonomies be provided in marked up form. While the rest of the Financial Statement need not be marked up with Inline XBRL tagging instructions, it can be reviewed by that agency as a web page. This mechanism has its pros and cons, but for tax or prudential regulators, or for corporates that seek to leverage the Inline XBRL standard, it is a very useful side effect.

Looking ahead, how should we think about Inline XBRL?

Many users and potential users of XBRL, attracted by the strong semantics and extensibility of the language, find Inline XBRL an extremely natural and useful adjunct.

iXBRL:

• solves the rendering problem (referred to above).
• is intuitive for users.
• has certain advantages from an auditing and review perspective.
• is straightforward for developers and software vendors to adopt. Apart from anything else, it's possible to "right click" an Inline XBRL web page, view source, and quickly understand the syntax.
• combines structured and unstructured information for Business Intelligence and content management systems to leverage.

Numerous experts believe that Inline XBRL will be the main path in ongoing XBRL adoption. A business report that is both human and computer readable is a sensible and digestible progression.

Where does Inline XBRL fit into Enterprise Reporting?

Environments that require reports containing well-defined performance measures and metrics combined with commentary and/or structured data that is not homogenous, are ideal candidates for the application of Inline XBRL. iXBRL (and resulting XBRL) can be subjected to a range of automated data quality tests, detecting anomalies and issues at source and can be a key and low impact way to untangle and control "Excel Spaghetti".

Inline XBRL can be used as part of Finance Transformation projects that seek to bring about a portfolio-centric reporting paradigm, based around the use of standards and baked-in controls. Key issues in these kinds of initiatives are the central, but extensible, management of performance metrics in the form of a metadata repository (at least in part consisting of an Enterprise XBRL Taxonomy initiative); the implementation of a business rule layer that incorporates taxonomy-driven data quality rules and consistent metrics as well as routing and workflow rules for the management of approvals, review steps and a BI layer that can quickly respond to change.

More resources:

• XBRL International Web Site - Inline XBRL Specification Package
• See particularly the Use Cases and the Primer
• CoreFiling Blogs on Inline XBRL
• Hitachi XBRL Blog articles on Inline XBRL
• There is a Mozilla Firefox Addon that provides samples, the open source processor and some editing tools for the technically minded. Have a look over here, and
• Here is the XSLT based Inline XBRL extractor.