MyCIMA

XBRL for Internal Reporting Use?

Posted: Monday 08 February 2010 by Nick Topazio
Replies : 1
Keywords: Management reporting

XBRL is mainly being talked about with respect to its use in external financial reporting i.e. as a tool to facilitate extraction of data from multiple sources.  However, some are saying that the technology has application within groups to facilitate consolidation and analysis of internal accounting information especially on an international basis.

I wonder whether anyone has had experience of looking at this possibility yet? I personally think that most international organisations already have a method of collating and reporting internal management accounting information and that XBRL will not necessarily have a significant part to play here, at least in the near-term but I may be wrong - any thoughts?

XBRL for Internal Reporting Use

Posted by Mike Willis on Tuesday 09 February 2010 16:11

Note: I am the current XBRL International Chairman.

Companies are using XBRL within their corporate infrastructure to enable enhanced internal transparency, process agility and IT effectiveness.  The use of information standards provides semantically enable interoperability across a wide range of disparate internal systems.  Additionally, XBRL enables standardization of formulas/business rules and references which is being used to enhance data quality and streamline internal reporting processes, transparency and collaboration. 

 Below are a few publicly available case studies:  

> Fujitsu - "How XBRL Transformed Fujitsu's IT Platform", presentation by the Global Fujitsu CIO at a recent XBRL Conference in Washington, DC. http://18thconference.xbrl.org/sites/18thconference.xbrl.org/files/hanaoka.pdf

Primary business benefits: 

- Lower cost implementation and maintenance environment

- Improved access/transparency by business users

- Enhanced process agility/adaptability

> Wacoal - Breathing New Life into Legacy Systems http://www.xbrl.org/Business/Companies/Breathing-New-Life-into-Old-Systems.pdf   Primary business benefits:

- Real time cash management

- Shortened month-end closing time by two days, and improves the quality of managerial reporting.

- Reduction of indirect costs and enhancements in data quality and availability of relevant information

- Automated access of business unit ledgers & sub-ledgers

- Post-merger system interoperability via standardized ledgers taking weeks

As with other supply chain standardization efforts, a more consumer driven process is an outcome.  The internal consumer is often management accountants looking to access relevant information from across a very wide range of internal and external data stores.   XBRL provides a standardized language to facilitate the access, reuse and analysis of such information.

Please note that the Internal XBRL taxonomy concepts are different from the publicly available external XBRL taxonomy concepts that are commonly promulgated by standards bodies and regulators.