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Sustainable Data, Open Standards and XBRL News – Written by Gianluca Garbellotto + Guest Bloggers

XBRL FAQ – DATA Act Special Edition: Will Adoption of Open Standards Cost A Lot to the Government?

Q The DATA Act aims at introducing open standards for the communication and publication of Government data. Doesn’t this require changing all the software applications and information systems of the reporting agencies, which tanslates into huge additional costs?
A Actually, the opposite is true.Firstly, existing information systems do not have to be changed to enable them to generate data using open standards such as XBRL. This is a common misconception, mostly based on inefficient approaches adopted by software vendors and users to embed XBRL into their solutions.In reality, as multiple case studies have demonstrated, existing systems remain untouched, and the conversion of data stored in those systems to XBRL can be achieved by deploying inexpensive mapping applications and by using XBRL Global Ledger (XBRL GL) as a bridge between source data and the XBRL reporting taxonomy of choice.

Secondly, the inexpensive and more efficient approach to the conversion of internal data to XBRL described above has a high degree of re-usability in additional processes, even very different in scope and nature, internal to the agency or related to external reporting concerns. In other words, the same technology, once deployed, can serve multiple purposes and achieve significant cost reductions and process benefits for the single Agency and the government as a whole, contributing to the automation of manual and inefficient data-related processes.

This means that not only the introduction of open standards for the publication of Government data has a low impact in terms of additional IT costs for the single Agencies, it will also drive cost savings and increased efficiencies much beyond the scope of the specific reporting concern for which it was initially introduced.

If you have a XBRL question that you think is of general interest, just contact me or send me a direct tweet at @iphixbrl. I will answer it as an XBRL FAQ.

1 Comment

  1. XBRL increases the usability of financial statement information. The need to re-key financial data for analytical and other purposes can be eliminated. By presenting its statements in XBRL, a company can benefit investors and other stakeholders and enhance its profile. It will also meet the requirements of regulators, lenders and others consumers of financial information, who are increasingly demanding reporting in XBRL. This will improve business relations and lead to a range of benefits. With full adoption of XBRL, companies can automate data collection. For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently. Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy.

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