XBRL

XBRL (eXtensible Business Reporting Language) is an open standard for exchanging financial data in a standardized manner. It is based on XBRML, but includes a fixed structure and set descriptions (the taxonomy). XBRL is developing – both nationally and internationally – into an important standard for reporting and exchanging data with, for example, regulatory bodies and tax authorities. Furthermore, it can be used within organizations, for example, to exchange data between systems or to compile regular reports from various sources and/or systems.

 

Open standard

As XBRL is an open standard, XBRL data can be imported directly into various software applications. This may yield savings in the gathering and processing of business information. Using the Internet, their business networks or related technology, users can view, import and/or process business information in XBRL format immediately, regardless of their location or software application.

 

Taxonomy

Standardization means that all data is uniquely labeled and defined. This requires a so-called taxonomy in which conventions regarding context and specific data are defined. This taxonomy can be seen as a type of dictionary: it contains an “explanatory list” of terms used, including their mutual relationships. Using the taxonomy allows an XBRL-enabled program to "know", for example, that "EBITDA minus write-offs & capital depreciation equals EBIT”. In other words, the interpretation of financial data becomes an unambiguous process.

 

Implementation

As part of the Netherlands Taxonomy Project, the Ministries of Finance, Justice, Foreign Affairs and Economic Affairs, together with the Confederation of  Netherlands Industries and Employers (VNO-NCW) and the Dutch Federation of Small and Medium-sized enterprises, have signed a covenant for the electronic exchange of financial data between the Dutch commercial sector and government agencies. With a view to easing the administrative burden, the parties have agreed to use the XBRL open standard from 2007. This will let entrepreneurs submit a range of important financial documents to the relevant government agencies simply and electronically, either from their own offices or via their accountants. These documents include the annual accounts for the Chamber of Commerce, business-profits returns and corporate income tax and statistical information for the Central Bureau of Statistics. Implementation of XBRL is estimated to yield savings of 350 million euros for Dutch trade and industry.

Compulsory

It is quite possible that regulatory bodies/the government will make XBRL the compulsory standard in the future. If this does happen, companies will be obliged to modify their reporting processes and systems to handle XBRL.

 

Grant Thornton’s role as covenant partner

As a provider of accountancy, tax and advisory, we understand that you are an entrepreneur first and foremost. We also understand that you, as an entrepreneur, want your administration to run as efficiently and effectively as possible. Grant Thornton can help you achieve this. As a covenant partner working together with government authorities, Grant Thornton is committed to using XBRL to help companies like yours lift the administrative burden as quickly as possible.

 

In light of these developments, Grant Thornton aims to offer you during the course of 2008 the option of electronically submitting your annual accounts to the Chamber of Commerce. In time, other convenient options will follow such submitting tax returns and statistic information in XBRL format to the Central Bureau of Statistics. It goes without saying that we will keep you well abreast of any further developments with respect to XBRL and its benefits.