XBRL GL Use Cases
The current Hot Topic focuses on the use cases of XBRL GL, the standardized
Global Ledger. Stepping back from a theoretical framework and take a look at its
possible practical uses is the easiest way to envision its potential application
in our own environment. This is by no mean an exhaustive list, and it is
actually meant to grow, with more use cases added and with more detail provided
on each use case. Potentially, we would like to develop a prototype or a proof
of concept to illustrate each use case.
If you have suggestions on use cases that you would like to see added to the
list, or thoughts or questions on this topic, please contact us.
Cross-Industry XBRL
GL Use Cases
Data Migration
XBRL GL facilitates movement from one operation/accounting product to another.
As a company grows out of a product, needs to migrate to an online system or
another operating platform, or needs to switch products for any other reason,
the standardized export means the new product functionality can include
pre-analysis and guidance in moving data between systems.
Data Archival
Companies need to capture and archive their data. However, most companies will
change software products - and will definitely see versioning issues even with
the same vendor and product line - and a standardized format will make the data
reusable independent of platform, vendor, product and version.
Data Integration
As a universal and global meta data structure, XBRL GL allows to exchange
transaction/detail level data coming from different sources, achieving
interoperability between different applications (technical interoperability) and
different business/accounting practices (domain interoperability): so data
coming from different business units/departments/subsidiaries, some or all with
their own ERP system and located in different countries can be moved/exchanged
between the various modules of the information system, or between different
information systems. In this respect XBRL GL can be viewed as a particularly
effective format to be used by ETL applications.
Consolidation
XBRL GL allows not only to exchange data within an entity (or different
entities), but offers also a standardized way to identify and manage
consolidation and elimination entries when data is coming from different
units/departments and needs to be represented in consolidated statements.
Payload for Web Services Oriented Architectures
XBRL GL is the ideal payload for a web services-oriented architecture: it makes
data accessible independently from the application(s) they reside in, allowing
to share, exchange and validate data with external parties that do not
necessarily have access to the corporate information system, and that do not
necessarily use the same applications and same formats: customers/vendors,
banks, auditors, or business partners to which one or more functions or
processes have been outsourced.
Auditing and Compliance
XBRL GL enables a seamless audit trail, and allows implementing rules-based
monitoring, triggers and alarms across the whole information system and its
various components.
Cross-Industry XBRL
GL/FR Use Cases
Bridge between Transactions and Final Reporting
XBRL GL enables to integrate information coming from the main ERP system
with other information stored in separate systems or in the "spreadsheet hell",
standardize it and use it to feed one or more XBRL Financial Reporting
taxonomies (or other XML schemas) to reuse the same data for different internal
and external reporting purposes.
Reconciliation
The use of XBRL GL to represent data at detail/transaction level and the
possibility that it offers to link to multiple XBRL Financial Reporting
taxonomies or other schemas provide a powerful and effective way for drilling
up, drilling down and drilling around from summary reports to the underlying
detail data, allowing to
- Reconcile different internal or external reports: executive, statutory,
regulatory, auditing;
- Reconcile multi-GAAP reports in a global enterprise environment.
Industry Specific
Use Cases
Banks and Financial Institutions reporting to FDIC
FDIC’s Call Report is submitted by banks and financial institutions in XBRL FR
format. Typically, the conversion to XBRL happens at summary level: the vendors
that support the Call Report submission on behalf of the reporting banks receive
the report in the format chosen by the bank, then convert it to XBRL and submit
it to FDIC. In this context, the value proposition of the use of XBRL for the
banks is minimal: it is just another format in which the information can be
represented and exchanged, and there is no cost reduction for the reporting
entity.
By adopting XBRL GL to represent entries and transactions that ultimately roll
up to the Call Report, a bank can actually leverage the potential of XBRL in
terms of integration and reusability of data and automated reconciliation of
reports with the underlying data.
The same, obviously, applies to any entity reporting in XBRL (or other XML based
standards): for example companies participating to the SEC VFP.
Entities Using Industry Specific XML-Based Transactional Standards like MISMO
XBRL GL is not designed to be a transactional standard, but can represent
transactions expressed in any other XML standard as they flow along one entity’s
information system: if you want to exchange an invoice with a business partner
you will use ebXML, but if you want to represent the entries related to that
invoice in a corporate information system you will use XBRL GL. MISMO is the
mortgage industry XML standard: the integration with XBRL GL offers obvious
advantages for its users.
