XBRL stands for eXtensible Business Reporting Language. The X also stands for XML, a computer language similar to HTML that is a powerful means of communicating via the Internet. At its most technical, XBRL is a method of exchanging information of a business or financial nature.
The idea behind XBRL is to represent each datum as a separate entity with its own identity tag. Large groups of data can also be classified with unique tags. Examples of this are net profit and business gain or loss. Each of these is known as a taxonomy, or a method of identifying data in a specific way for a specific purpose.
In this way, data is made easily readable by computer data processors. Whereas HTML or plain-text presentations would list a financial institution's numbers as blocks of text, XBRL provides a more natural and user-friendly way for data to be shared. Think of it this way: You don't have to manually input all those numbers anymore. Or, as is more likely the case, the computer doesn't have to translate text into numbers and back into text again. Rather, XBRL is a straight swap.
XBRL provides the means to effect a direct transfer of numbers data from one place to another in the blink of an eye. And the faster a computer can process data, the more data processing it can do in a given period of time. Data searches can take less time, as well as credit checks, report building, investment analysis, and a whole host of other financial practices.
XBRL is not a closed language. On the contrary, it is an open standard. Anyone can use it, and no one has to pay a license fee. Adept programmers can customize XBRL standards to their own ends. Who specifically uses XBRL? Accountants, banks, financial analysts, creditors, economic agencies and stock exchanges are all examples of entities that thrive by using XBRL.