XBRL - a data format for reporting business results - has the potential to change the way company information is reported and analyzed. However, it's growth is expected to have only a modest near-term impact on the job market for IT specialists.
The growth of XBRL will have modest impact on the job market, at least in the near term.
XBRL "frees up the staff - whether MBAs, M&A analysts, or researchers and accountants - from data collection tasks so they have more time for analysis," says Deb Doane, vice president for product marketing at EDGAR Online. The company's I-Metrix service provides corporate filing information in XBRL along with analytical tools that facilitate research and analysis.
Banks in the U.S. already prepare their reports to federal regulators using XBRL. However, the standard will get increased attention as more public corporations use it to file their quarterly and annual reports. The advantage for investors, analysts and researchers is that they can import that data directly into Microsoft's Excel, then work with the figures to, for example, compare several companies side by side and use a variety of analytical tools - all without manually typing in the data. (A prototype of the Microsoft Office Tool for XBRL available is on NASDAQ's Web site.)
"The SEC has been very vociferous in promoting this," observes Doane. Indeed, SEC Chairman Christopher Cox is an enthusiastic backer of XBRL. "Interactive data will vastly improve the delivery of financial information to individuals and institutions alike," he says. "It has the potential to slash hours of waste, cost, and inefficiency - not just for the users of financial data, but for the companies that prepare it, as well. Even more importantly, it will help level the playing field for tens of millions of average investors."
Despite such enthusiasm, efforts to encourage companies to files their reports using XBRL have gotten off to a slow start. After the format was unveiled in 2000, about 20 companies - mostly technology firms like Intel and Microsoft, but also Morgan Stanley - participated in an initial pilot program. Now some of the original firms have dropped out. To replace them, the SEC has recruited firms such as General Electric, PepsiCo and Banco Itaú Holding Financeira S.A.
The growth of XBRL will have modest impact on the job market, at least in the near term. Financial users already live in Excel, notes Doane, XBRL simply makes them more productive. A few firms have job openings directly related to the format, including the Financial Accounting Standards Board, which is hunting for an XBRL manager, and CoreFiling, a compliance specialist that is seeking New York-based accountants to help clients adopt the XBRL standard.
More information about the standard is available at www.xbrl.org.