XBRL Implementation Status: Doing a Reality Check

It was only few months back when I wrote the post - Semantic Technology, Financial Reporting and Toxic Assets. The post was more about how XBRL and the Semantic technology can play a big role in addressing issues related with toxic assets in the world of financial derivatives. It is becoming more clear now that XBRL is almost a movement which is going to have deep impact on how information between businesses, regulators and investors across the Internet will be communicated in the next decade. XBRL is not only considered the most revolutionary change in financial reporting since the first general ledger but also one of the most successful semantic web format. So what is the status of XBRL implementations? You can check this  interview with Eric E. Cohen, co-founder XBRL, about the recent updates. You can also find some good information at Charles Hoffman's blog or  http://xbrlplanet.org/. I also liked the section on XBRL in David Siegel's Pull where he talks about the history of XBRL.



Some of the points which I found interesting are:

• XBRL is almost ten years old but the real adaption has started in the last few years only
• Regulators are one of the first group to adopt it. Regulators who are adopting XBRL are : Capital market regulators, tax offices, banking regulators, national statistic offices, corporate registrars
• Corporate America has already been complying with a mandate from the Securities and Exchange Commission for nearly a year to “tag” financial data in XBRL
• There have been issues in many projects but no significanlty failed XBRL project has been reported
• June 15th, 500 public companies did XBRL filings. Another 50 have started doing this even though they didn't have to file. 2009 taxonomies came late so 2008 taxonomies were used
• June 15th 2010, another 1500 will start filing in XBRL
• June 15th , 2011, another 10,000 will do
• One pending bill in Congress would direct all federal agencies to adopt XBRL for all requests for government bailout funds and all required reports on how those funds are used
• Edgar Online gets $12 million from Bain Capital  for XBRL efforts
• Using XBRL, FDIC reduced the time to report information from 45 days to 2 days
• European Parliament is the largest government body who has expressed interest in XBRL
• The Securities and Exchange Commission launched its XBRL information portal, which can be found at http://xbrl.sec.gov/
• The investment in person hours that it took to create either the IFRS or the US GAAP taxonomies dwarfed the total hours needed to create XBRL itself
• Over 90% of Spanish banks now report in XBRL
• Holland and Newzealand are already accepting tax returns and other government required documents in XBRL
• Nevada is one of the first US state who is trying to use XBRL in many of its operations
• XBRL taxonomies may not be interoperable. For e.g, the US GAAP and the IFRS taxonomies are all used for financial reporting but are significantly different
• MIX (Microfinance Information Exchange) which collects information from more than thousand microfinance institutions is using XBRL. It is the first non-profit to use XBRL
• Data aggregators and distributors have not embraced XBRL in any significant way
• Taxonomy extensions is one of the hardest issue to solve as it reduces standardization and make interoperability very difficult
• You can find some common errors in XBRL implementations in this excellent article
• It is observed that few technologists have accounting domain knowledge and few accounting experts have technology domain knowledge in XBRL projects
• XBRL International, Inc. (XII), has released “XBRL: Towards a Diverse Ecosystem," a discussion document seeking public comment on the future business requirements and technical roadmap for the XBRL business information standard. The document may be downloaded here.

I am sure that there will be many more highlights but it gives good idea that things are looking good for XBRL despite some initial challenges. It is still in early stages of adoption on Wall Street. But the progress is being made and it looks like that the financial reporting and analysis landscape is going to be a very different one in the coming years!

Semantic Search momentum continues: Netbase gets 9 million dollar funding

It was only six months back when Netbase, a semantic search company focused on Health and Consumer segments, went through lot of negative publicity after Techcrunch published this story titled "Netbase thinks you can get rid of Jews with Alcohol and Salt." NetBase Solutions’ HealthBase, a semantic search engine that aggregates medical content from millions of authoritative health sites including WebMD, Wikipedia, and PubMed was the center of this story when many users found some glaring glitches. It wasn't over for Netbase despite heavy criticism as it is evident from this news which say that it has raised $9 million in venture capital funding, completing its Series C round with Altos Ventures and Thomvest Ventures Inc --obviously, the VCs are seeing something which the media couldn't. In my opinion, these technologies are still a long way from being perfect and we will continue to see 20% to 40% errors - in many cases, it is dependent on the domain/content and the technology needs to be tuned for that.

The marketing message of Netbase is not very different from what you hear from many companies in the semantic search, natural language or text analytics space but they do have global brands like PandG and Elsevier as customers. The company also claims that by April about sixty percent of nurses around the world will be looking up information in its resources with the help of NetBase’s HealthBase Insight Discovery tool.

Overall, it is good news for semantic search companies who are trying to raise money as VCs believe that they have a good future and demand will only grow. I am sure they are aware of imperfections but can still see the value it can deliver to solve certain problems in a particular domain.