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Introduction and benefits

Introduction and benefits

 

Introduction to XBRL

 
  • XBRL (Extensible Business Reporting Language) is an advanced reporting language of the XML family. XBRL ensures that the figures reported to government authorities and other organisation does not remain dormant piece of printed papers but these figures can be used in data analysis.
     
  • XBRL stands for eXtensible Business Reporting Language. It is one of a family of "XML" languages which is becoming a standard means of communicating information between businesses and on the internet. 
     
  • XBRL is being developed by an international non-profit consortium of approximately 450 major companies, organisations and government agencies. It is an open standard, free of licence fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. 
     
  • ICAI took initiative in 2001 for implementation of XBRL as a first step towards Digital data Reporting. Knowing the fact that it would take some time before it gets approval from the ministry. It took 10 yrs for the ministry of corporate affairs to release mandate for filing of annual accounts in XBRL format.
     
  • Though this fact must be iterated that the Reserve bank of India has already started this reporting method for the Indian banks reporting , but nonetheless it was at very miniscule level.
 

Benefits of XBRL
 

  • The idea behind XBRL, eXtensible Business Reporting Language, is simple. Instead of treating financial information as a block of text - as in a standard internet page or a printed document - it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag.
     
  • The introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data "intelligently": they can recognise the information in a XBRL document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.
     
  • Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyse data much more rapidly and efficiently if it is in XBRL format. 
     
  • XBRL can handle data in different languages and accounting standards. It can flexibly be adapted to meet different requirements and uses. Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software.