Understanding the difference between data-centric and document-centric information management in the context of XBRL is key to grasping its utility. As Gary Thompson says in a recent blog post :
A financial report or an electronic health record are not data sources but are instead presentation layers by which data is consumed.
There are in fact three layers to a financial report: the data layer, the content layer and the presentation layer. And it’s important to be clear about why using a data standard, like XBRL, is important at the data layer.The row/column format of a conventional spreadsheet is an example of a de-facto standard for a presentation layer that organizes data in a familiar way for communicating financial information. US-GAAP or IFRS is an example of an agreed standard for a content layer that defines the terminology and business rules that are associated with a specific presentation of data to suit a specific jurisdiction, domain or regulator. XBRL is an example of a standard for the data layer that is specifically intended to make sure that the data you see presented (e.g. a number in a financial report) means what you think it means – whatever content layer or presentation layer is being used to deliver the data to information consumers.
The great thing about spreadsheets is that you can stick numbers wherever you like in terms of their presentation but how can you be sure that the number in one presentation format is in fact the same number in another? In practice the way this is generally done is by ‘referencing’ the number in some other spreadsheet, that references some other sheet etc. Unless I can drillback through all these references I can never be certain that the number being presented in the current ‘layer’ I’m in actually means what I think it means.
What XBRL brings to the table is that if I present a ‘tagged’ number from my reporting repository in one spreadsheet and present it again in some other document, I know the number means the same thing and I can check it because it is easy to ‘hover’ over an XBRL tagged number and view the actual definition of the XBRL element used for that number. The benefit is not just that we know the number used in one presentation format means the same thing as in another (if it is XBRL tagged); it also means that if we change that number (not the tag) in the XBRL reporting repository it changes the presentation of that number wherever that that XBRL tagged number is referenced by a content or presentation layer that can source XBRL data. Without having to update a network of formulas or links or pointers or change the number in lots of different presentation layer-documents.
Using XBRL tagged numbers in the presentation layer, rather than non-tagged numbers, means that you can always be sure what the number means, however it is presented, and that if you change the number in one place you can always be sure that updated number will ‘ripple through’ to wherever that tag is referenced .
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