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Liz Hurley's socks – a beginner's guide to XML and XBRL

by Simon Hurst on 11.02.2008 04:28

The terms XML and XBRL are starting to crop up with increasing regularity. Microsoft based the new file formats for the Office 2007 applications on XML and all sorts of applications are starting to use XML to provide access to data and make it easier to share. The Carter Report set out deadlines for HMRC to require certain types of information to be filed electronically and XBRL is the chosen mechanism.

Let's get the definitions out of the way first – XML stands for eXtensible Markup Language and is an evolution of the language in which web pages are written – HTML. XBRL stands for eXtensible Business Reporting Language and is an application of XML to a particular task, the reporting of financial information.

Fortunately, the first Austin Powers film (International Man of Mystery) included a simple introduction to the concept of XML. In one scene Liz Hurley’s character revealed the contents of her suitcase. The most exciting thing about this (from the IT viewpoint) was that, not only were all the individual items of clothing in their own plastic bags, but each bag was labelled. This is the essence of XML. Each item of data is individually wrapped and given a label. This means that the information can not only be displayed in a browser like any HTML file, but can also be read directly by a computer application.

Of course, almost all accounts programs label data anyway – for example, the ‘Sales’ account will use a nominal ledger code as a label. However, what is special about XML is that it will be a standard. This comes from its HTML background – the whole point of HTML is that an HTML file must be capable of being converted into a web page by any browser. This means that a computer program that recognises XML ‘tags’ could potentially find the sales figure from any accounts package that complied with the XML standard.

This explains why HMRC and Companies House are so interested in the use of XML. Rather than receive printed documents which have to be handled, read, and the data re-keyed, an XML-based file could be received electronically. The data could then be extracted directly and automatically by the receiving system.

Where the potential amount of data to be submitted is restricted the process is relatively straightforward and Companies House already accept the filing of Audit Exempt Abbreviated Accounts and Dormant Company Accounts in XBRL format. However, filing full accounts is much more complex and requires not only an extensive 'taxonomy' covering all the likely data items, but a very sophisticated and complex mechanism to convert the data into human readable format.

For fuller descriptions of XML and XBRL have a look at Wikipedia:

http://en.wikipedia.org/wiki/XML

http://en.wikipedia.org/wiki/XBRL

and the ICAEW library XBRL resources page: http://www.icaew.com/librarylinks/index.cfm?AUB=TB2I_26793

For the Companies House WebFiling service:

https://ewf.companieshouse.gov.uk/