XBRL (Extensible Business Reporting Language) is an electronic format for simplifying the flow of financial statements, performance reports, accounting records, and other financial information between software programs. It is a digital version of the same financial information that is currently printed on paper. XBRL is a subset of the much wide internet programming language known as XML (Extensible Markup Language). XBRL aims to bring standardization to the business information supply chain. XBRL aims to improve the efficiency of communication to investors and financial markets, as well as the aggregation and analysis of business information, and financial statements.
Like XBRL, FpML®(Financial products Markup Language) is a subset of XML and is the industry–standard protocol for complex financial products. FpML® is overseen by ISDA. It is based on XML (Extensible Markup Language), the standard meta–language for describing data shared between applications. The main users of FpML are Dealers, asset managers, hedge funds, service providers, technology companies are the main users of FpML®. For the history of XBRL please go to www.fpml.org
Below a study of XBRL by Soeren Heitmann and Annika Oehling
This reporting system works like a typical programming language with a number of tags that generate human and machine readable prints. FpML® has a description of a broad group of underlying assets, which be used for pricing. FpML® also has a description of loans and deposits. In addition to the product description in XML format, FpML defines a set of business processes. The FpML specification describes the data that needs to be exchanged within these processes, as well as the message flows. Examples of processes include Request for Quote, Confirmation, Affirmation, Novations, Terminations, Increases, Amendments, Credit Event Notice, Allocations, and Cash Flow Matching. The language can handle:
IRD: Interest Swaps, Swaptions, FRA’s, Caps and Floors, Inflation Swaps and Bullet Payments.
FX: Spots, Foreign Exchange Swaps, Forwards and FX Options.
Credit: Credit Default Swaps, Credit Default Indexes, and Baskets.
Equity: Equity Swaps, Equity Options, Variance Swaps and Total Return Swaps.
These digitally enhanced reporting methods bring many benefits. First and foremost is the reduction in the cost of analyzing and reporting business information. Second they bring increased speed and efficiency of business decisions, as consistent tags allow comparisons and analysis to occur more quickly and efficiently. There is an enhanced distribution of business information without loss of data integrity.
Instead of creating multiple report outputs for multiple data requestors XBRL allows the same financial information to be reused for different purposes. In other words XBRL simplifies the way financial data is extracted and used by various members of the financial information supply chain. Electronic availability of financial information and transparency of data is key in today’s financial markets. XBRL solves the complications of cross–border deals by addressing the way financial reporting data is communicated by using XML, a globally recognized standard for transmitting data. By putting financial data in an open standard format (XML), XBRL is helping change the way business information consumers are able to have access to financial information, 24x7, via the Internet.