Extensible Business Reporting Language (XBRL) is an open specification that uses XML-based data tags to describe financial statements. Both public and private companies can use the specification.
According to the XBRL organization, XBRL is intended to be a "standards-based method with which users can prepare, publish (in a variety of formats), exchange and analyze financial statements and the information they contain. It is intended to allow for the automatic exchange and reliable extraction of financial information across all software formats and technologies, including the internet."
There are three terms to understand when working with XBRL:
- Specification: The technical description of the function of XBRL and explanation of how to build XBRL documents and taxonomies.
- Taxonomy: A "vocabulary" or "dictionary" created by a group, compliant with the XBRL specification, created in order to exchange business information.
- Instance: A business report, such as a financial statement, prepared to the XBRL specification. The meaning of the values in the instance document is defined by the taxonomy; therefore, an instance document is typically only useful when you know the taxonomy used in its preparation.
To use the XBRL format, you must first acquire a taxonomy that suits your needs from your region's filing authority.