A standard language for reporting over the Internet, XBRL makes financial information more visible to all interested parties. It can reduce the cost of accessing financial reports, making analysis of the information cheaper, better and faster. It's evolving in fits and starts, but experts say that once a few giant companies begin using XBRL, the starts won't stop.

Suppose you wanted to see earnings and revenue figures for several of your competitors at six-month intervals dating back to the beginning of 2000. How would you find the information? You'd have to sift through stacks of old financial reports. Imagine how much easier your life would be if a few mouse clicks could bring those numbers instantly to your computer screen. That's the future of financial reporting and analysis — delivery of key data from a wide variety of sources to any user's desktop in that user's choice of format — thanks to extensible business reporting language (XBRL).

XBRL, a derivation of extensible markup language (XML), will improve the speed, efficiency and reliability of the exchange of financial information via the Internet, enabling corporations and individuals to make more informed decisions faster than ever before. It will do this by providing a system for labeling each element of a business report (e.g., intangible assets, notes payable, earnings per share). Once a report's data has been labeled with XBRL tags, all XBRL-compliant applications can recognize what component of accounting each number represents, so a report produced by one software package can easily be imported into another application.

"It's a natural extension of today's Internet technology to the financial reporting process," says Mike Willis, partner with PricewaterhouseCoopers in Tampa, Fla., and chair of the XBRL steering committee of the American Institute of Certified Public Accountants (AICPA). "XBRL provides a platform for the future of business reporting over the Internet, and it will be fundamental to the way companies communicate with stakeholders. XBRL is to financial reporting what HTML has been to the Internet."

Because XBRL has the potential to standardize distribution of financial information, it will make companies far more transparent than they are now. No longer will reports need to be processed in different formats for different users. Financial data will be coded once, then rendered automatically into any reporting form — from annual reports to reports for external auditors or SEC filings to reports for the company's business partners. Preparation of financial statements will be much more efficient. Extraction of financial statement information will be much more reliable. And XBRL will significantly reduce the cost of accessing information, making data analysis cheaper, better and faster.

"Look at a set of financial statements like a 10-K, which might be 50 or 60 pages long. To get revenue numbers on a company like Microsoft you'd have to find the document, open it up and find the information by wading through the document," says Willis. "With XBRL, the tools are there to find that information for you in a matter of seconds or minutes. At some companies, there may be thousands of people searching for financial information. Each one of them could potentially cut their search time by 90 percent, enabling analysts to spend more time on analysis and make quicker business and investment decisions." Search tools based on XBRL will give analysts and investors instant access to whatever information they want to see.