Great tech news article in Federal Computer Week on June 17, 2016 about the United States Internal Revenue Service (IRS) moving forward with an XML data format for machine-reading of tax forms starting with the non-profit sector for better transparency and data analytics.
The announcement by the IRS bodes well for the XBRL Consortium and its efforts to support the use of structured data for better “big data” analytics and to promote better transparency.
Covered forms include electronically filed Form 990, Form 990-EZ and Form 990-PF from 2011 to the present, which the IRS is publishing with some personally identifiable tax-identification numbers redacted. According to the agency, more than 60 percent of Forms 990 are filed electronically.
According to the article in FCW:
“ The IRS is taking a step to open data on the financials of tax-exempt organizations… in machine-readable XML format.”
In the UK – HMRC (Tax Authority) requires corporations to file in the iXBRL data format – a structured data format like XBRL. More than 5 million organizations send their tax data to UK HMRC using the iXBRL data format.
Is this the first step toward XBRL that the IRS will pursue using XML tagging for structuring of data and better data analytics?
What is the difference between HTML, XML, XBRL and iXBRL?
According to XBRL USA:
“ HTML and XML are both mark up languages, but that’s where the similarities end. HTML (Hypertext Markup Language) is a way of “tagging” text to cause it display in a certain way. For example, HTML tags are used for putting a heading here, starting a paragraph there and making that text bold (if you’re a blogger, you probably know some of the tags and how they are used). By contrast, XML (eXtensible Markup Language) was designed for storing and transporting data. RSS (Really Simple Syndication) feeds are made possible by XML (if you don’t know what RSS feeds are and you like to follow certain Blogs or news sources, you should learn how to utilize RSS).
XBRL (eXtensible Business Reporting Language) is an XML based technology. In other words, XBRL can be used to store or transport data. What makes XBRL unique is that it is designed for business and financial data use. XBRL “tags” utilize standard taxonomies. The XBRL Consortium, an international non-profit, promotes the use of XBRL and develops standard XBRL specifications & taxonomies. There are many standard taxonomies that can be used for business and financial reporting (taxonomies for various accounting standards used around the world for example).
By tagging business data with a standard taxonomy (US GAAP taxonomy for example) the tagged data can be stored, moved from system to system and reported to outsiders (who can in turn understand the data in light of its standard taxonomy). XBRL can be read by many software programs (including Excel and Word) and understood when related to the standard taxonomy. XBRL files reported to the SEC (as an exhibit to the 10-Q or 10-K) and posted to company websites can be quickly downloaded into a software tool for ad hoc analysis. This makes the reported financial reports increasingly transparent.”
What is the difference between XBRL and iXBRL?
According to the Irish Tax Authority also using iXBRL data format like the UK HRMC:
Standard XBRL is presented as a series of tags and numbers. iXBRL, or inline XBRL, is a more recent version of the language, which allows financial information to be presented in a format that is both human readable and machine-readable. This is achieved by presenting the data (e.g. financial statements) in a normal document format but with XBRL "tags" embedded in the soft copy document.
Last week, the US SEC announced that public companies can begin sending their financial statements in the IXBRL format.
The IMA supports the use of XBRL open, freely available structured data standard for the capital markets and government for better reporting/transparency/accountability.
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