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/