suneetk/investopedia_terms huggingface dataset:
# eXtensible Business Reporting Language (XBRL): Investor's Guide

## What Is eXtensible Business Reporting Language?

XBRL or eXtensible Business Reporting Language is a software standard that was developed to improve the way in which financial data is communicated, making it easier to compile and share this data. Notably, eXtensible Business Reporting Language is an implementation of [XML](https://www.investopedia.com/business-essentials-4689832) (extensible markup language), which is a specification that is used for organizing and defining data online.

XBRL uses tags to identify each piece of financial data, which then allows it to be used programmatically by an XBRL-compatible program. XBRL allows for easy transmission of data between businesses.

### Key Takeaways

*   eXtensible Business Reporting Language (XBRL) is a freely available global framework of accounting standards used for exchanging business information. 
*   XBRL is based on XML coding and is a standardized way of transmitting financial records around the world.
*   The most current version of XBRL, v2.1, was published in 2003 and has remained stable. Several optional modules exist as add-ons.

## Understanding eXtensible Business Reporting Language

Imagine that you are looking at a company's [financial statements](https://www.investopedia.com/terms/f/financial-statements.asp) online on the company's website. Traditionally, these statements would simply be in plain text. If you wanted to put these numbers into a spreadsheet file to run analysis on the statements, you would have to either manually type or copy and paste each account and corresponding number into the spreadsheet.

However, if the data on the site was available in eXtensible Business Reporting Language (XBRL), you could simply convert this data from the website into a spreadsheet program (usually instantaneously) that is XBRL compatible.

Due to the standardized nature of the identification tags and the language itself, financial data from one country, which has set accounting standards such as U.S. [GAAP](https://www.investopedia.com/terms/g/gaap.asp), can be easily compiled into the accepted accounting standards of another country even if they are drastically different. The reporting of financial data in XBRL is not required by all companies, but because it has become prevalent, it has been suggested that it won't be long before all companies will have to report their financial data in this language. iXBRL, where _i_ stands for inline is an update that allows for XBRL metadata to be embedded in an HTML document.

XBRL was developed in 1998 with version 1.0 by the American Institute of Certified Public Accountants ([AICPA](https://www.investopedia.com/terms/a/american-institute-of-certified-public-accountants.asp)). The latest version of the standards, v2.1 was formalized in the year 2003. While the v2.1 standard has remained stable since then, several XBRL modules have been developed that can be plugged in to achieve new functionality or operability.
# Zero-Proof Bookkeeping: What It Is, How It Works

![Zero-Proof Bookkeeping](https://www.investopedia.com/thmb/qygllYvHgvFHGP5A06sUPgb8Qr8=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/terms_z_zero-proof-bookkeeping_FINAL-f037d6e7dbe44505b06bf3ce49f5c4ee.jpg)

*— Investopedia / Daniel Fishel*

## What Is Zero-Proof Bookkeeping?

Zero-proof bookkeeping is a manual bookkeeping procedure used in accounting in which posted entries are systematically subtracted from an ending balance to check for errors. In zero-proof bookkeeping, a balance of zero when all entries have been subtracted is proof that the accounting entries have been entered correctly. In this way, this practice is quite similar to keeping a [balance sheet](https://www.investopedia.com/terms/b/balancesheet.asp), which is a common financial statement issued by firms that balances assets with liabilities and shareholder's equity - such that subtracting the left side from the right side of the balance sheet results in a sum of zero.

Zero-proof bookkeeping is employed as part of a [double-entry](https://www.investopedia.com/terms/d/double-entry.asp) bookkeeping system, where credits (liabilities) and debits (assets) are kept track of simultaneously.

## Understanding Zero-Proof Bookkeeping

This method, used as part of a double-entry bookkeeping system, may be used to reconcile accounting differences in situations where the number of entries or transactions is not overly large. A typical situation where zero-proof bookkeeping is used is by bank tellers to reconcile differences at the end of a day. Zero proof bookkeeping is not practical where large numbers of transactions are the norm, and many of the figures are rounded. Thus, this practice is most often used by smaller businesses or for individual purposes.

Because zero-proof bookkeeping is carried out by hand, it is a laborious and time-consuming process. It is also tedious in that the same sort of manual calculations must be carried out on a regular basis, for example, at the end of each business day. Of course, this work can be augmented with the work of calculators or spreadsheets such as Microsoft Excel.

To start in the zeroing out process, the bookkeeper will first engage in "footing" the ledger. The footing here means [summing up all of the numbers recorded](https://www.investopedia.com/terms/f/footings.asp) in a single column of the accounting ledger. The resulting sum, which appears at the bottom ("foot') of the column is then used to reconcile against the other columns by comparing and subtracting debits from credits (cross-footing). An example of zero-proof bookkeeping in practice is the use of balance sheets by firms where [shareholders' equity](https://www.investopedia.com/terms/s/shareholdersequity.asp) is used as a figure (either positive or negative) to balance assets with liabilities so that they add up to zero on net.
# Zone of Possible Agreement (ZOPA): Definition in Negotiating

![Image](https://www.investopedia.com/thmb/dLgdDRGuDjYsF0iHCnV-yi5Jo0E=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/dotdash_Final_Zone_Of_Possible_Agreement_ZOPA_Apr_2020-01-38699a61a3cf471a9dcea739ea768c40.jpg)

*— Image by Sabrina Jiang © Investopedia 2020*

> **Definition**
>
> A zone of possible agreement (ZOPA) is the range in a negotiation where two or more parties can find common ground and potentially reach a mutually acceptable deal.

## What Is a Zone of Possible Agreement (ZOPA)?

Not a physical place, the zone of possible agreement or bargaining range is considered an area where two or more negotiating parties may find common ground. It is this area where parties will often compromise and strike a deal.

In order for negotiating parties to find a settlement or reach an agreement, they must work towards a common goal and seek an area that incorporates at least some of each party's ideas.

### Key Takeaways

*   A zone of possible agreement (ZOPA) is a bargaining range in an area where two or more negotiating parties may find common ground.
*   A ZOPA can only exist when there is some overlap between each party's expectations regarding an agreement.
*   If negotiating parties cannot reach a ZOPA, they are in a negative bargaining zone.

## Understanding a Zone of Possible Agreement (ZOPA)

No matter how much negotiation occurs, an agreement can never be reached outside of the zone of possible agreement. In order to reach an agreement successfully, negotiating parties must understand one another’s needs, values and interests.

A ZOPA can only exist if there is some overlap between what all parties are willing to accept from a deal. For example, in order for Tom to sell his car to John for a minimum $5,000, John must be willing to pay at least $5,000. If John is willing to offer $5,500 for the car, then there is an overlap between his and Tom’s bottom lines. If John can only offer $4,750 for the car, then there is no overlap, and there cannot be a ZOPA.

## Negative Bargaining Zones

When negotiating parties cannot reach a ZOPA, they are in a negative bargaining zone. A deal cannot be reached in a negative bargaining zone, as the needs and desires of all parties cannot be met by a deal made under such circumstances.

For example, let’s say that Dave wants to sell his mountain bike and gear for $700 to buy new skis and ski gear. Suzy wants to buy the bike and gear for $400, and can’t go any higher. Dave and Suzy have not reached a ZOPA; they are in a negative bargaining zone.

However, negative bargaining zones can be overcome if negotiating parties are willing to learn about one another’s desires and needs. For example, let’s say Dave explains to Suzy that he wants to use the proceeds from the sale of the bike to buy new skis and ski gear. Suzy has a pair of gently-used, high-quality skis that she is willing to part with. Dave is willing to take less cash for the mountain bike if Suzy throws the used skis in. The two parties have reached a ZOPA and can, therefore, make a successful deal.
# Understanding Folio Numbers: Essential Guide for Investors and Accountants

## What Is a Folio Number?

In [mutual funds](https://www.investopedia.com/terms/m/mutualfund.asp), a folio number is a unique number identifying your account with the fund. Like a bank account number, the folio number can be used as a way to uniquely identify fund investors. It also records the amount invested, transaction history, and contact details of each investor.

These numbers allow accountants, lawyers, and regulators to review a fund's transactions and ensure that they are correct. Folio numbers can also identify journal entries or land parcels. Different fund houses may use varying methods to create folio numbers.

### Key Takeaways

*   A folio number uniquely identifies your account in mutual funds, akin to a bank account number.  
    
*   Folio numbers help track investments, recording important details like fund amounts and transaction history.  
    
*   They are used by accountants, lawyers, and regulators to ensure accuracy across various financial records.  
    
*   Investors can consolidate multiple folio numbers into one for easier personal accounting and tax reporting.  
    
*   Folio numbers are crucial for creating audit trails and detecting fraudulent financial activities.

## The Role and Importance of Folio Numbers in Investments

The term "folio" (_leaf_ in Latin) can refer to a single sheet of paper or its page number in a larger book. In [accounting](https://www.investopedia.com/terms/a/accounting.asp), a folio number references a bookkeeping entry, usually numbered chronologically or sequentially. By referencing an entry's folio number, its details can be found and analyzed.

All mutual funds need some sort of record-keeping system in place. This information is necessary for ensuring each investor is returned the money they are entitled to, and for determining what [fee structure](https://www.investopedia.com/terms/f/fee-structure.asp) applies to each investor.

Usually, brokers handle record-keeping, but investors might need to provide folio numbers to ensure accuracy. This folio number may be present on investment statements or may be obtained through your broker. You can make numerous or multiple purchases using one folio number, but the purchases must be in the mutual fund when using the same digits.

Folio numbers are useful to creditors, lawyers, and regulators, extending beyond mutual funds. In suspected fraud cases, investigators use folio numbers to trace fund movements. Folio numbers also help catch duplicated ledger entries and ensure accurate financial statements.

> **Important**
>
> A folio number is a unique number to identify accounts with a mutual fund, and you can get your folio number from your investment statements or through a broker.

## Important Considerations When Using Folio Numbers

Investors can have multiple folio numbers with a mutual fund company but can request consolidation into one. This helps investors with personal accounting and tax reporting. Electronic record-keeping requires effective tracking and reduces mistakes, easing reconciliation.
# Income From Operations (IFO): What it is, How it Works, Example

![Income From Operations (IFO)](https://www.investopedia.com/thmb/9u-BemPec7A8YqoNck3P5NnZ2_I=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/final55-5e3b0e4f724341fcbc766a34ba7613a5.jpg)

*— Investopedia / Jake Shi*

> **Definition**
>
> Income from operations (IFO) is the profit a business generates from its core activities, excluding income from other sources such as investments or asset sales.

## What Does Income From Operations Mean?

Income from operations (IFO) is also known as operating income or [EBIT](https://www.investopedia.com/terms/e/ebit.asp). Income from operations is the profit realized from a business's own operations. Income from operations is generated from running the primary business and excludes [sundry income from other sources](https://www.investopedia.com/terms/s/sundryincome.asp). For example, this would exclude income generated from selling the property of a manufacturing company.

## Understanding Income From Operations (IFO)

Income from operations is the same as operating income. By only looking at the profit generated in normal business operations, it makes it easier to understand the potential future profitability of the company. To calculate [operating income](https://www.investopedia.com/terms/o/operatingincome.asp), start with revenue from operations, then subtract the cost of goods sold and other operating expenses such as the [cost of labor](https://www.investopedia.com/terms/c/cost-of-labor.asp). Interest earned or paid should not be included. Taxes paid should not be deducted either. Do not include any gains or losses from investments or the purchase or sale of business assets. Income from operations only involves revenue and expenses involved in the day-to-day run of the business.

## Example of Income From Operations

For example, if a car company spends $100,000 building and selling cars then sells them for $110,000, it has $10,000 in income from operations. Because this is income generated only from normal operations, an investor could assume that similar income will be generated every year as long as operations continue.

As another example, if Bob sells apples, he could take the revenue he earned from selling the apples, then subtract the costs incurred for care and picking of the apple trees while the apples were growing, then subtract anything he paid to folks to care for, pick, or sell the apples. The amount left over would be the operating income from Bob's apple business.