Meaning of XBRL:
XBRL stands for eXtensible Business
Reporting Language. It is a computer
language used for the electronic
communication of business and
financial data which is revolutionizing
business reporting around the world.
Who developed XBRL:
XBRL is an open, royalty-free software
specification developed through a process collaboration between accountants and
technologists from all over the world. Together
they formed XBRL International which comprises of
almost 650 members including global companies,
accounting professionals, technology professionals,
government officials and financial services bodies.
Advantages of XBRL to companies:
- Increases the usability of financial statement
information-
Currently financial statements are prepared in
XML, excel or HTML format which can be easily
read but not easily processed or analysed in
accordance with the user’s needs. E.g. The
word ‘sales’ appears at many places in financial
statements but if the reader wants to have all
sales references and related information in one
place, he would need to do so manually. Once
the data is in XBRL format, this manual effort
would not be required.
- Automates data collection-
Data from different company divisions with
different accounting systems can be assembled
quickly, cheaply and efficiently.
How do companies create statements in XBRL:
- XBRL compliant accounting software products
are now available which will support data in
XBRL form Statements can be mapped into XBRL using XBRL
software tools designed for this purpose
- Data from the accounting database can be
extracted in XBRL format. It is not strictly
necessary for an accounting software vendor to
use XBRL. Third party products can also achieve
the transformation of data to XBRL
- Applications can transform data in particular
formats into XBRL. The route which an individual
company takes depends on its requirements and
the accounting software and systems it currently
uses among other factors.
Additional clarifications expected from MCA:
- Mechanism for companies to ensure that such
financial statements meet the MCA XBRL
compliance and validation tests
- Guidance whether the MCA will provide a portal to
file financial statements in a predetermined XBRL
compliant format so that companies can save cost
and efforts in doing XBRL conversion themselves.
To put it simply, XBRL is a language for information. It
accurately reflects data reported under different standards.
It does not change the data. The MCA has set up a
dedicated website on XBRL on its homepage
www.xbrl.org.in, which provides useful information
including a brief manual on filing. The MCA website is likely
to post options for XBRL reporting by 15th of July 2011. |