Governments looking to root out the next Enron have an ally in extensible business reporting language (XBRL), a markup language developed by accountants that tags financial data, making it easier for computer systems to understand and integrate. The idea is to help number-crunching machines sort out massive amounts of data, catch inconsistencies and reduce paperwork.
Businesses, however, haven't exactly been jumping on the XBRL bandwagon. The US Securities and Exchange Commission and the IRS maintain voluntary XBRL programs. However, the FDIC will begin requiring banks to implement XBRL by this fall. Some suggest that businesses are wary of the increased scrutiny that XBRL will provide, while others point out that the standard is still in its early stages, without out-of-the-box tools that businesses could easily implement.
Aside from catching white-collar crooks, XBRL has other creative applications in business metrics. Canada's environmental agency, for instance, plans to use XBRL to measure the business cost of pollution.
Source: Reuters, Techdirt
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