XBRL—A Language of the Government 2.0 World

Liv Apneseth Watson, Senior Executive, IRIS Business Services described XBRL. She explained how XBRL is changing financial reporting in the public sector. XBRL is not about technology, according to Ms. Watson, it is about solving major data problems. XBRL is, fundamentally, an electronic language that helps both the private and public sector effectively and efficiently bridge the current gap between business systems by crossing artificial boundaries. She challenged the audience to consider the amount of re-keying of financial data done today and the difficulty in finding business information on the Internet.

Ms. Watson said that XBRL is like universal bar codes but for financial reporting. Compelling reasons for XBRL:

• Making financial and business information exchange better, faster, and cheaper
• Making financial reporting more transparent and discoverable
• Explicitly articulating business meaning and thus enabling the exchange of that meaning between humans or between business systems
• Improving data integrity
• Integrating business systems
• Saving government agencies money and making them more efficient

She described the problem in the SEC in the United States to find financial information. Businesses provide this information, but the SEC cannot find the appropriate information. The FDIC in the United States was able to increase the accuracy of data from 64% to over 90% by using XBRL.

XBRL is tagged data that is machine readable. It is a standard way to communicate business and financial information. XBRL is an open source international standard operated by a non-profit consortium. It is more than financial reporting. It provides a global business reporting supply chain. Machine readable makes data re-usable.

Ms. Watson described how XBRL provides more functionality than previous methods. XBRL uses" hyperlinks on steroids," according to Ms. Watson. She described the taxonomy of an XBRL item. The presentation element of XBRL enables translating labels to multiple languages. This reduces the cost to report in multiple languages.

The methods for calculating business and statistical information can be linked to the XBRL item. This means that the information will be presented based on national or international standards. XBRL can also help identify mathematical errors in financial reports. She also described XBRL in context to spreadsheet applications. XBRL has the intelligence to label, identify context and show formulas eliminating "Excel hell". Anyone with data locked with proprietary systems will be at a disadvantage compared to those with open discoverable data, according to Ms. Watson.

Many governments have adopted XBRL. Her presentation described:

• Macedonia reporting portal
• International Accounting Standards Board
• Securities and Exchange Commission - USA
  
• Federal Deposit Insurance Organization - USA
• Committee for European Securities Regulators
• State of Nevada
  

Ms. Watson showed a live demonstration of a sample XBRL database. She switched languages to French and Chinese. Therefore, organizations that adopt XBRL are fully compliant with international standards. Ms. Watson believes that XBRL can make countries more competitive.

XBRL will enable the semantic web and linked data, according to Ms. Watson.

Liv A. Watson heads Global Business Development for IRIS Business Services Private Limited. She is one of the founders of the XBRL Intentional Consortium. She is the co‐author and contributor author to several of books including “XBRL for Dummies” and Governance, Risk, and Compliance Handbook published by Wiley.

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Ms. Watson suggested the following links for more information:

• XBRL International
• US Securities Exchange Commission
• XBRL EU
• XBRL at IASB

Using XBRL to Improve Transparency in Brazilian Government

Ana Cristina Bittar de Oliveira, IT Department, National Treasury Secretariat, Ministry of Finance, Brazil described how new technologies are bringing greater access to public information. She described how information technology can be used to bring transparency and reform to governments. She described the Financial Data Collection System (SICOF) Project in Brazil.

States and Municipalities in Brazil had different standards making it difficult to compare across governments. Transparency and standard reports were difficult to prepare. She described the Fiscal Responsibility Law for transparency in government entities. Government entities need to be transparent to receive transfer payments. Brazil has developed accounting standards through a common chart of accounts. These standards are being rolled out to all levels of government.

The data collection system in use, called SISTN, was developed quickly. The system is difficult to maintain because it uses an Excel-type manual data entry. The reporting process is complex. The output in PDF format is not user friendly, according to Ms. de Oliveira. It does not support re-use of data. The system is high maintenance.

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The government of Brazil decided to create a more effective standard and automate the system. The motivation was to reduce administrative costs, make data more flexible and ensure that all data is consistent across the government, according to Ms. Oliviera.

Ms. Oliveira described the integration approach using XBRL. The eXtensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data which is revolutionising business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

Ms. Oliveira described how XBRL supportse the Common Chart of Accounts in a very convenient format. The Chart of Account is the basis for the definition of the Reports data dictionary or taxonomy. And, the taxonomy can be extended to support other government needs. She said that part reporting burden is managed the taxonomy. This reduces the cost and burden of the reporting process in local and regional governments. She said that the Government of Brazil has not encountered a better approach than XBRL.

Governments in Australia, New Zealand, Singapore and the Netherlands are leveraging XBRL. The Government of Mexico is also considering XBRL. Ms. Oliveira emphasized that the use of open standards enables more cooperation on good practices across governments.

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