A year-old consortium named XBRL.org is developing a standard for the online preparation and exchange of business reports and financial data.
The group has representatives from 55 global companies and is trying to enroll more banks. J.P. Morgan, Fidelity Investments, and Morgan Stanley Dean Witter & Co. are members, and Wells Fargo & Co. and Bank of America Corp. are considering using the consortium's standard, eXtensible Business Reporting Language, for some projects.
XBRL.org expects to have 100 international members by yearend and to make a formal launch of its standard in Germany, Canada, the United Kingdom, Hong Kong, Singapore, Malaysia, Australia, New Zealand, and Taiwan, by yearend.
The launch in Germany is slated for late September and will be sponsored by Deutsche Bundesbank.
XBRL.org's initial goal is to provide a new framework - based on the eXtensible Markup Language, or XML - that businesses would use to create, exchange, and analyze financial reporting information, including, regulatory filings, general ledger information, and audit schedules.
The XBRL standard is an open one, and the consortium that created it aims to simplify the reading of 10K and 10Q filings, cash flow statements, income statements, and balance sheets by putting the relevant data into readable spreadsheets.
The American Institute of Certified Public Accountants spearheaded the formation of XBRL.org. Member representatives have been meeting once a month for two days at a time since last September to build the framework.
Christy Reichhelm, B2B enterprise applications industry manager at Microsoft Corp. and the software giant's representative in the consortium, said XBRL.org is "bringing together the accounting, software, and financial services industries around the world to build an eXtensible Markup Language framework to transmit financial and business reporting data over the Internet."
The group delivered the first beta of the framework April 6 and version 1.0 July 31. The specification can be downloaded from www.xbrl.org. "We're one of the first consortia to create an XML language standard and to deliver on it," Ms. Reichhelm said.
Zachary Coffin, XBRL liaison chairman and program leader of the digital media institute at KPMG Consulting LLC in Los Angeles, said, "We want to really communicate this to the banking industry, because no single industry will benefit from XBRL in more ways than banking."
Mr. Coffin has recently been giving presentations about XBRL to financial institutions in Europe and Asia. The consortium will host symposiums for the financial services industry on Sept. 11 in Los Angeles and Sept. 13 in New York.
The consortium has also briefed U.S. government agencies, like the Department of Defense, about putting the language in place.
"XBRL will make it easier for companies to get the attention they deserve from capital markets, and easier for creditors and investors to identify true business performers," Mr. Coffin said. "Unite these two communities with XBRL, and you have the most significant development in financial reporting since the birth of the Internet."
The consortium has seven subgroups that each will target about 10 industries, including financial services.
"Within a one- to two-year time frame, we hope companies will be reporting in XBRL," Ms. Reichhelm said. "We're trying to create one way to standardize so as to create a document once and render it in lots of formats. We're trying to make the hunting and gathering of data easier and more accurate."
Mr. Coffin said the consortium's other priorities right now are to get new members, hook up with other Internet initiatives and alliances, such as the W3 consortium, and to get all industries to use XBRL. Elmer Huh, an accounting analyst at Morgan Stanley Dean Witter and chairman of the international domain user group within XBRL.org's steering committee, said that while the consortium's focus right now is on financial statements, the language will eventually be extended to credit processing and loan approval-type reporting.
"This is the next step in applying XML to applications tailored to a specific purpose, industry, or sector," Mr. Huh said.
He said XBRL will help financial institutions save money and make it easier both for the investment community to carry out timelier analysis and for the reporting community to lower the cost capital risk associated with companies reporting results. "There is very little out there on an XML platform that competes with XBRL," Mr. Huh said.
