Microsoft has submitted data to the U.S. Securities and Exchange Commission (SEC) using a newly released taxonomy for a financial reporting language designed to make it easier to compare companies' financial figures.
Microsoft filed a Form 8-K, comprising financial data for shareholders, using XBRL (Extensible Business Reporting Language), an XML-based standard for financial data that's increasingly being used in Europe and the United States.
Microsoft said it's the first company to submit data using a new XBRL taxonomy released on Wednesday that allows the description of data according to U.S. Generally Accepted Accounting Principles (GAAP). The taxonomy defines, for example, what tags should be used to label data such as "net profit." Taxonomies differ between countries due to varying local laws and regulations.
The advantage of XBRL is that it is machine-readable, and computers can use the tags to pull out comparable data from different companies from their filings. It saves a person from having to read through financial reports to find specific data, as companies typically have different styles of presenting their financial data in reports.
Microsoft is one of about three dozen companies participating in a one-year pilot program to submit reports in XBRL, according to the SEC. The SEC has run a voluntary XBRL filing program since 2005.
Other U.S. agencies such as the Federal Deposit Insurance Corporation are also using XBRL, saying use of the format has reduced data processing costs and made financial data available faster for analysis.
In Europe, the United Kingdom's tax agency, HM Revenue and Customs, will require businesses filing tax data in XBRL by 2010. Other XBRL projects are underway in Belgium, Denmark, Germany, Italy, the Netherlands, and Spain.