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.