As many readers know, Walter Hamscher is an XBRL pioneer and one of the smartest people in the field. He recently gave us a wide-ranging interview in which he discussed a host of XBRL topics, including the SEC’s proposed mandate, the pace of XBRL adoption in the US and abroad, assurance issues, and Inline XBRL. The fifth and final installment of the interview, which begins with question (12), appears below. The first, second, third, and fourth parts were published over the past few weeks. 

(12) One of your special strengths is communicating technical topics to diverse audiences in plain English. It seems that XBRL poses a special challenge in this regard, i.e., it’s very hard to explain even the rudiments of XBRL without getting highly technical very quickly. Do you think it’s possible to give general business audiences a sense of what XBRL is in plain English?

Well, I used to think that and I think it’s still possible. But I would certainly say that as a community we often expose way too much of the technology. The reason we’ve had to do that is because we haven’t paid enough attention to the applications, so we wind up talking about the data format, and the taxonomies, and showing people angle brackets.

For example, you can use the Web for years and only know that there is thing called a browser; you don’t even know that there is a thing called HTML. Whereas we have done it the other way around. We talk a lot about the language without really focusing on applications; there is no fully defined notion of an XBRL browser, there is no basic application that uses XBRL. There is also this kind of mental wall between using Excel spreadsheets and using XBRL. We never should have let that wall grow up between the two ideas.

People are going to use spreadsheets. Spreadsheets are incredibly powerful, they are a great idea; we really should be talking about how XBRL is something that makes the data in spreadsheets more consistent, more usable. It’s very easy to find text on the web that makes it sound as if XBRL is some alternative to spreadsheets. I mean that is just silly, it’s not an alternative. It’s an improvement to spreadsheets.

I would go so far as to say that even if I never see another application other than Excel using XBRL I would be happy. That is not a problem for me, but for whatever reason there are not enough Excel-based applications, plug-ins, and alternatives to make XBRL come alive for people.

So we talk about the standard, we talk about the taxonomies. The reality is that, instead of talking about the taxonomy, we should talk about — it should almost be like a hidden sheet within an Excel Workbook. “Oh, and by the way, this hidden sheet has a bunch of definitions in it,” and so on. We would be a little further along in having people be familiar with XBRL, but we always talk about the data structures rather than the application.

Well it seems to me you’re almost saying that the underbelly of XBRL, all those angle brackets – it’s not worthwhile trying to explain that to people. We should just go ahead and try to develop applications in the same way we use a browser, where most people don’t worry about the HTML at all.

I wouldn’t go so far as to say that we should ignore it, but let me put it this way. I had to write the Preparers Guide for the US GAAP Taxonomies, and it was frustrating because I couldn’t refer to any particular application or set of specific operations that one would do.

I can make all those operations and give them names, and give them a sequence, and never actually refer to the software and then talk about things like axis and dimensions and so on. I don’t really think that most users need to know that anymore than when they are creating a chart in PowerPoint they really need to know how all that stuff works underneath.

How exactly that line is drawn I don’t know. But I think that is, unfortunately, where we are. If I had it all to do it over again, I know that I would have liked to spend a lot more time on simple applications and Open Source software to get the stuff into the hands of developers so that they could actually be used in existing applications.

I think we have a complex specification because financial reporting is complicated, and it’s going to take a while for all the software to catch up to it. But once the software does catch up, I think people will see enormous value in XBRL and they will do things with it we haven’t even thought of.

(13) Where do you see the future of XBRL? Do you think it will go beyond the financial realm to become the lingua franca for all business information? Is there anything specific the XBRL community should be doing now to foster its use? I think you have answered that to some degree in discussing the development of software, but is there anything you would like to add?

For our current XBRL community, it’s very important that they go get the free products, download them, try them, and give feedback to the vendors. Even if the feedback is “I couldn’t get it to work,” that’s valuable to the vendors.

It’s the vendors who are in this community that have invested a great deal in it. In contrast with that investment, I don’t sense that they get enough useful feedback from the XBRL user community. I don’t think the vendors are quite getting the feedback they need about what are the simple features that their tools need in order to make all this usable. I think if everybody who went to the Eindhoven Conference would spend a few hours downloading the free tools and try to use them, and then just send a note to the vendors and say, “this didn’t work, but that did,” that would be a great, great, great thing. Because I just don’t think that happens enough.

The other part of your question was whether I think XBRL is going to be the lingua franca for all business information.  Actually I do, and I think that the evidence for that is that there is absolutely nothing else on the horizon that comes even close.

So the first question is, will there ever be a lingua franca? You can believe that or not believe it.  But if you do believe there is going to be one, then XBRL is definitely going to be it — there is no alternative.

So then the question becomes, is the lingua franca needed? Well, I think with the globalization of markets and the globalization of all kinds of reporting — including business performance metrics and sustainability reporting – it’s obviously yes; there’s a huge number of other opportunities for XBRL.

We just need the software, and we need the community to really get engaged in trying the software and giving feedback to vendors.

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