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News > XBRL: a universal financial language

Business reporting is developing its very own lingua franca, XBRL, a unique language in which data mean the same in all languages on all computers to all people. The Banco de España is one of its main standard-bearers.

International Accounting Standards ensure that the same accounting concept is defined in the same way in Finland, Greece and Spain.

But unless we speak Finnish, Greek and Spanish, we remain unable to compare the balance sheet of a Finnish company with a similar Greek or Spanish firm. And even assuming these companies were to publish their balance sheets in, say, English, we would have to manually take and even type out data and figures again to analyse and process them.
XBRL resolves this shortcoming.
XBRL - the acronym of eXtensible Business Reporting Language - is the vehicle to make financial information flow in a world marked by the IT/communications phenomenon that is the Internet. Its aim is to formalise the structure, content and representation of each figure so it means the same in all languages on all computers to all people.

Direct translation

If we copy a Finnish, a Greek and a Spanish balance sheet in XBRL format from the Internet onto our own spreadsheet, then we are able instantly to compare and analyse the data. Language translation is not necessary as this has been done previously in the XBRL standard.
XBRL is the opportunity to be able to analyse 100% of the information available. On Europe’s financial markets our companies have to compete as effectively as those from other countries. Thanks to XBRL, financial information is equally comprehensible whatever language it may have been in.
Evidently, there is a background to and an enormous amount of work behind this.

XBRL came about further to the proposal launched in 1998 by Charles Hoffman, an expert accountant and auditor, to simplify the mechanisation of financial information exchange by using the then-emerging and now ubiquitous (in all Internet-related matters) XML language. Hoffman was fully aware of the need to order this exchange as a result of his long-standing experience of automated accounting systems.

XBRL is simply the adaptation of XML (eXtensible Mark-Up Language) to financial information, this language covering the need on the Internet to describe what each figure means. For example, “Madrid Barcelona 2” on screen could refer as much to the number of flights from Madrid to Barcelona as it could to an away-win on the Spanish football pools. Such ambiguity is resolved on the Internet by defining the meaning of each figure. And this is where XML (XBRL for business reporting) comes into play.


This formalisation of each figure on a balance sheet - indicating its characteristics, its name in different languages, the attendant International Accounting Standards, how all the meta-information applicable to it is represented - is what is known as an XBRL taxonomy. There are various taxonomies, such as Balance Sheets (more formally IFRS), Ledger, Basel II, etc.

As an XBRL taxonomy fully describes a financial information set, a balance sheet for instance, and does so in a computing language that programs can understand, we can cease to worry about how the information is represented.

XBRL is thus the presentation layer so that financial information, e.g. balance sheets based on Internal Accounting Standards, is not only comprehensible and comparable when a person reads it, but when a computer reads it. And people now process few figures without computer assistance.

Each XBRL taxonomy must be developed, formalised and accepted internationally. At the national level it must also be translated and, where appropriate, amplified with the details proper to each country.

Asociación XBRL España

The organisation XBRL International is the forum where XBRL taxonomies are internationally approved and where the guidelines for the technical development of this language are set. XBRL International comprises over 250 national non-profit XBRL organisations (known as XBRL jurisdictions).

The Spanish XBRL jurisdiction was set up in April 2004 under the name of Asociación XBRL España para el desarrollo de estándares tecnológicos (Spanish XBRL Association for the development of technological standards). There were 11 founding members, including most notably the Banco de España, CNMV (National Securities Market Commission), consultant registrars, AECA (Spanish Accounting and Business Administration Association) and credit-rating, services and technology companies. At present there are 24 members (banks such as BBVA and Popular, and software, hardware and communications companies, among others), and the number is expected to rise to 40 during 2005.

Asociación XBRL España is chaired by the Banco de España Director General for Banking Regulation, José María Roldán, its General Secretary is Federico Flórez, Director of the Bank’s Information Systems Department, and its Strategy Committee is chaired by Manuel Ortega, Head of the Bank’s Central Balance Sheet Data Office. Other Bank staff are members of the Association’s various working groups.

There is a plan to implement XBRL projects over the coming years which will simplify the reporting of data to Banking Regulation, the CBSO and Balance of Payments.

One application the Banco de España has developed enables appraisal companies to report the data required under current regulations via the Internet. The advantages over the traditional paper-based reporting procedure are readily perceivable.

For some time now the Spanish financial market has been integrating with our European counterparts, not forgetting our presence in Latin America. Financial reporting has to adapt to this reality, and XBRL is the universal language specifically created to ease the way for such reporting.

This particular concern is already being acknowledged by the XBRL international community: the Banco de España has acted as host for the working groups preparing two of the most important international taxonomies for the business reporting world. The Group “General-Purpose Financial Statements for Financial Services", in which a large number of Spanish experts is participating, has finalised its Public Working Draft. This document includes the banking area and the new International Accounting Standards.

The Committee of European Banking Supervisors, chaired by the Banco de España Director General for Banking Regulation, José María Roldán, has instructed its Technical Group on Basel II requirements to submit a Data Model, a prerequisite for a taxonomy. In sum, this position offers exceptionally worthwhile alignment and anticipation opportunities for Spanish XBRL users, and the chance to exert a legitimate influence on any future European and international standards in this area. Such action will safeguard the value of our commitment to XBRL.

Federico Flórez
Director of the Information Systems Department, Banco de España
Executive Director of XBRL España




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