XBRL is a freely available electronic language for financial reporting that is based on Extensible Markup Language (XML) and is produced and consumed by XBRL-enabled software. After data is mapped, software—rather than human labor—is used to select, analyze, store, and exchange information, thereby reducing the chances of error. Moreover, because it is a standardized language, XBRL enables efficient apples-to-apples comparison of financial data across multiple companies and industries. To this end, XBRL applies identifying mappings to items of data, enabling them to be processed and analyzed in an interactive way. XBRL mappings provide financial communities with a digital standards-based method to prepare, publish, reliably extract, and automatically exchange financial statements of publicly held companies. XBRL does not establish new accounting standards. Instead, it enhances the usability of existing standards.
XBRL taxonomies specify an arrangement of data so that the value of a concept is defined within a context. For example, company ACME, Inc. reports Gross Profit of $152,623 in Quarter 1. This information can be represented in XBRL as it indicates the company identity (ACME, Inc.), a reporting concept (Gross Profit), the reported currency (dollars), time period, and decimal/precision rounding setting.