Introduction to XBRL:

What is XBRL?

XBRL (eXtensible Business Reporting Language) is a language for electronic communication of business and financial data. 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 set to become the standard way of recording, storing and transmitting business financial information.

XBRL is simply a language for information. It is capable of use throughout the world, whatever the language of the country concerned, for a wide variety of business purposes. It will deliver major cost savings and gains in efficiency, improving processes in companies, governments and other organizations. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

XBRL in India
Ministry of Corporate Affairs

The MCA implemented a new filing requirement for companies incorporated in India to file their financial statements in XBRL format with effect from the Financial Year 2010-2011.

RBI's initiatives

The Reserve Bank of India has already launched the reporting system using XBRL through the existing Online Returns Filing System. With a view to providing direction for implementation of XBRL, RBI had set up a high level Steering Committee to develop and test the XBRL based reporting format.

SEBI's initiatives

Some of the significant developments which have since taken place in Indian securities market with the encouragement of SEBI include setting up of a XBRL enabled platform for corporate reporting ( by BSE and NSE. Both these have migrated to XBRL from the paper based model and offer a unified electronic platform, popularly known as 'CorpFiling' system, which enables the companies listed in either or both of the exchanges to electronically file their disclosures.

Why the need for XBRL?

Main objective of XBRL is Transparency. Companies currently file their Financial Statements in PDF format. This will provide more value-added financial information and enhance the regulatory environment with improved transparency and timely dissemination of relevant Financial Year.

Today's regulators are not challenged by Technology, but by vastness of data. For MCA (Ministry of Company Affairs), it is more than 60 e-forms, 100s of data fields, 900000 companies and Crores of pages of PDF documents & attachments. XBRL frees data from paper-based reports and allows it to flow seamlessly between XBRL-enabled software applications. It automates financial analysis. Computers can intelligently "read" an XBRL report to select specific data, pull it into documents and spreadsheets, analyze it, exchange it with other computers, and present it in a variety of formats. This can all take place in real time, allowing users to instantly compare hundreds of companies, industry sectors, topics, and issues, with automatic updates.

XBRL data is more robust, accurate, and transparent than data in financial statements that appears in legacy electronic and paper reports. For investors and analysts, XBRL eliminates the time, labor, and errors. XBRL tags both numbers and textual information, which means not only balance statements, but information such as statement of principals and Even footprints, appendices, and updates, is accounted for, to aid in internal audits and external research and analysis.

What are the differences between HTML, XML and XBRL?

HTML (Hypertext Markup Language) is a standard way of marking up a document so it can be published on the World Wide Web and viewed in a browser.

XML is a standard language which is maintained by the World Wide Web Consortium (W3C). XML does not replace HTML; it is a complementary format that is platform independent, allowing XML data to be rendered on any device such as a computer, cell phone, PDA or tablet device

XBRL is an XML-based schema that focuses specifically on the requirements of business reporting. XBRL builds upon XML, allowing accountants and regulatory bodies to identify items that are unique to the business reporting environment. The XBRL schema defines how to create XBRL documents and XBRL taxonomies, providing users with a set of business information tags that allows users to identify business information in a consistent way. XBRL is also extensible in that users are able to create their own XBRL taxonomies that define and describe tags unique to a given environment.

Benefits and Uses for Business

XBRL can be used by all types of organizations in order to save costs and improve efficiency in handling business and financial information. As XBRL is extensible and flexible, it can be adapted to a wide variety of different requirements. A company can benefit investors and raise its profile and can also meet the requirements of regulators, lenders and others consumers of financial information, who are increasingly demanding reporting in XBRL.

With the help of XBRL, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently. All participants in the financial information supply chain can benefit, whether they are preparers, transmitters or users of business data.

Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. Not only the data handling is automated, less time-consuming, error-prone processes, but the data can be checked by software for accuracy.