A U.S. nonprofit consortium is hoping the prospect of a $20,000 cash prize will help spur the creation of open-source software tools companies can use to work with the XBRL (Extensible Business Reporting Language) standard for financial reporting.
XBRL, a variation of XML (Extensible Markup Language), uses tags to describe various data elements inside financial documents, such as "net income," which is supposed to make it easier for investors to search through and analyze the information.
Reporting requirements for XBRL have been phased in over several years in the U.S. and now all U.S. Securities and Exchange Commission registrants must submit XBRL filings for quarters ending on or after June 15.
"A lot of the [open-source] XBRL tools out there now are for doing some generic processing of XBRL," said Phillip Engel, lead technologist for XBRL U.S., on Monday. "In this challenge, we're looking to expand that."
Moreover, the wealth of XBRL data now available means developers can concentrate on analytical software, Engel said. So far, "the focus has been on tools that help people produce XBRL. Now we're really starting to come to the other side of that and saying, how can we actually use this information?"
Ideally, teams who enter the contest will have members that specialize in programming while others are more steeped in the financial world, XBRL US said.
Participants won't be restricted to any particular licensing model, as long as it is open source. XBRL US does not plan to host the projects, but will link to them from its homepage.
Submissions must be received by Jan. 31, 2012, with final judging by a five-member panel taking place in late February 2012.
Open-source XBRL tools would provide an alternative to proprietary products from large companies like SAP and IBM, as well as pureplay vendors such as EDGAR Online.
The contest's focus on open-source software should not been seen as an endorsement of that model over proprietary products, said Michelle Savage, vice president of communication at XBRL US.. "We just wanted to open the door as much as possible."
Overall, XBRL seems to be experiencing the type of growing pains any new standard is likely to face.
In a letter to the SEC earlier this year, industry group Financial Executives International expressed support for a "sustainable XBRL reporting framework that can be consistently and cost-effectively applied by registrants of all sizes," but also cited concerns about the lack of viable tools for reviewing files.
The group, which represents 15,000 senior finance executives, also reported that investors showed only the slightest interest in viewing XBRL data.
"Of those companies that track the usage of this information on their corporate websites ... the number of hits ranged between 3 and 20 hits, per quarter and some of those may have been either employees of the company or the service provider verifying the accuracy of the final XBRL data posted on the websites," the letter said.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's email address is Chris_Kanaracus@idg.com.