IN this video, I explain the XBRL Extensible Business Reporting Language as it is covered on the CPA Exam BAR section.
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XBRL, which stands for eXtensible Business Reporting Language, is a global standard for exchanging business information. It's a language in the XML (eXtensible Markup Language) family, designed specifically for digitally communicating financial data.

Here are some key aspects of XBRL:

Digital Reporting: It allows the preparation, sharing, and analysis of financial statements, performance reports, and other business information.

Standardization: XBRL standardizes the way financial data is reported across different systems, making it easier to compare and analyze data from various sources.

Tagging Financial Data: Each piece of financial data is assigned a unique tag. These tags are defined in taxonomies, which are essentially dictionaries of tags that describe many kinds of financial information, making it easier to understand and use the data.

International Use: It's used worldwide by regulators, financial organizations, accounting bodies, and governments for various reporting purposes.

Improved Accuracy and Efficiency: By automating data exchange and eliminating manual re-entry, XBRL increases the speed, accuracy, and usability of financial information.

Compliance: Many regulatory bodies around the world require or encourage XBRL for financial reporting, as it facilitates easier and more accurate data aggregation and analysis.

In summary, XBRL is a powerful tool for financial reporting, ensuring that financial data is transparent, reliable, and easily accessible for various stakeholders.

Level 1 Tagging

In the first year of XBRL submission, companies are required to use Level 1 tagging. Here, each complete footnote and financial statement schedule is tagged as a single block of text. This means that entire sections of the footnotes or schedules are marked with one tag, representing them as distinct elements but not breaking them down further.
Level 2 Tagging

This level involves tagging each significant accounting policy within the significant accounting policies footnote. Rather than tagging the entire footnote as one block (as in Level 1), Level 2 requires each major accounting policy to be tagged separately. This provides more detail and clarity on specific policies.
Level 3 Tagging

At this stage, each table within each footnote or schedule is tagged as a separate block of text. This means that different tables, such as those detailing financial assets, liabilities, revenue breakdowns, etc., within a footnote are individually tagged. It provides more granularity, allowing users to identify and analyze specific data sets within the footnotes.
Level 4 Tagging

The most detailed level, Level 4, requires that within each footnote or schedule, each amount (whether it’s a monetary value, percentage, or number) must be separately tagged. This allows for the highest level of detail and precision. Users can access and analyze individual data points, like specific financial figures, within the footnotes.
This phased approach to tagging in XBRL allows companies to gradually adapt to the detailed requirements of XBRL reporting. Initially, companies provide a broad overview of their footnotes and schedules (Level 1), and over time, they progress to a highly detailed, itemized reporting format (Level 4). This detailed tagging enhances the transparency and accessibility of financial data, making it easier for analysts, investors, and regulators to conduct thorough and accurate analyses.