What is XBRL?

1. What  is  XBRL? 

XBRL is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world. 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 stands for eXtensible Business Reporting Language. It is already being put to practical use in a number  of countries and implementations of XBRL are growing rapidly around the world. 

2. Who  developed  XBRL? 

XBRL is an open, royalty-free software specification developed through a process of collaboration between accountants and technologists from all over the world. Together, they formed XBRL International which is now   made up of over 650 members, which includes global companies, accounting, technology, government and financial services bodies. XBRL is and will remain an open specification based on XML that is being incorporated into many accounting and analytical software tools and applications. 

3. What  are  the  advantages  of  XBRL? 

XBRL offers major benefits at all stages of business reporting and analysis. The benefits are seen in automation, cost saving, faster, more reliable and more accurate handling of data, improved analysis and in better quality of information and decision- making. XBRL enables producers and consumers of financial data to switch resources away from costly manual processes, typically involving time-consuming comparison, assembly and re-entry of data. They are able to concentrate effort on analysis, aided by software which can validate and process XBRL information. XBRL is a flexible language, which is intended to support all current aspects of reporting in different countries and industries. Its extensible nature means that it can be adjusted to meet 

particular business requirements, even at the individual organization level. 

4. Who  can  benefit  from  using  XBRL? 

All types of organizations can use XBRL to save costs and improve efficiency in handling business and financial information.   Because XBRL is extensible and flexible, it can be adapted to a wide variety of different requirements.   All participants in the financial information supply chain can benefit, whether they are preparers, transmitters or users of business data. 

5. What  is  the  future  of  XBRL? 

XBRL is set to become the standard way of recording, storing and transmitting business financial 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 organisations. 

6. Does  XBRL  benefit  the  comparability  of  financial  statements? 

XBRL benefits comparability by helping to identify data which is genuinely alike and distinguishing  information  which  is  not  comparable.  Computers  can  process  this information and populate both pre defined and customised reports. 

7. Does  XBRL  cause  a  change  in  accounting  standards? 

No. XBRL is simply a language for information. It must accurately reflect data reported under different standards - it does not change them. 

8. What  are  the  benefits  to  a  company  from  putting  its  financial  statements  into XBRL? 

XBRL increases the usability of financial statement information.   The need to re-key financial data for analytical and other purposes can be eliminated.   By presenting its statements in XBRL, a company can benefit investors and other stakeholders and enhance its profile.   It will also meet the requirements of regulators, lenders and others consumers  of  financial  information,  who  are  increasingly  demanding  reporting  in XBRL.  This will improve business relations and lead to a range of benefits. With full adoption of XBRL, companies can automate data collection. For example, data  from  different  company  divisions  with  different  accounting  systems  can  be assembled quickly, cheaply and efficiently.   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 can data handling be automated,  removing  time-consuming,  error-prone  processes,  but  the  data  can  be checked by software for accuracy. 

9. How  does  XBRL  work? 

XBRL makes the data readable, with the help of two documents - Taxonomy and instance document. Taxonomy defines the elements and their relationships based on the regulatory requirements. Using the taxonomy prescribed by the regulators, companies need to map their reports, and generate a valid XBRL instance document. The process of  mapping  means  matching  the  concepts  as  reported  by  the  company  to  the corresponding element in the taxonomy. In addition to assigning XBRL tag from taxonomy, information like unit of measurement, period of data, scale of reporting etc., needs to be included in the instance document. 

10. How  do  companies  create  statements  in  XBRL? 

There are a number of ways to create financial statements in XBRL: 

 XBRL-aware accounting software products are becoming available which will support the export of data in XBRL form. These tools allow users to map charts of accounts and other structures to XBRL tags. 

     Statements can be mapped into XBRL using XBRL software tools designed for this purpose 

 Data from accounting databases can be extracted in XBRL format.   It is not strictly necessary for an accounting software vendor to use XBRL; third party products can achieve the transformation of the data to XBRL. 

 Applications can transform data in particular formats into XBRL.   The route which an individual company may take    will depend on its requirements and the accounting software and systems it currently uses, among other factors. 

11. Is  India  a  member  of  XBRL  International? 

India is now an established jurisdiction of XBRL International. A separate company, under section 25 has been created, to manage the operations of XBRL India. The main objectives of XBRL India are 

 To create awareness about XBRL in India 

 To develop and maintain Indian Taxonomies 

 To help companies, adopt and implement XBRL. 

For more information, visit www.xbrl.org/in 

12. Which  taxonomies  developed  for  Indian  reporting  requirements?Where  can  I find  the  taxonomies? 

Taxonomies for Indian companies are developed based on the requirements of 

• Schedule VI of Companies Act, 
• Accounting Standards, issued by ICAI 
• SEBI Listing requirements. 

 Taxonomies  for  Manufacturing  and  service  sector  (referred  as  Commercial  and Industrial, or C&I) and Banking sector, is acknowledged by XBRL International. These taxonomies are available at http://www.xbrl.org/in/ 

13. Where  can  I  find  more  information  about  XBRL? 

Please visit www.xbrl.org. Also Ministry of Corporate Affairs would be shortly 

developing its webpage on XBRL with list of contact persons for training purposes. 

14. What are XBRL Documents? 

An XBRL document comprises the taxonomy and the instance document. Taxonomy contains description and classification of business & financial terms, while the instance document is made up of the actual facts and figures. Taxonomy and Instance document together make up the XBRL documents. 

15. What  is  Taxonomy? 

Taxonomy  can  be  referred  as  an  electronic  dictionary  of  the  reporting  concepts. Taxonomy consists of all the data definitions, the basic XBRL properties and the interrelationships amongst the concepts. It includes terms such as net income, EPS, cash, etc. Each term has specific attributes that help define it, including label and definition and potentially references. Taxonomies may represent hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships among them, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user. 

16. What  is  meant  by  extending  taxonomy? 

Taxonomy is extended to accommodate items/relationship specific to the owner of the information. Taxonomy extension therefore can be 

a)  Modification in the existing relationships 

b)  Addition of new elements in the taxonomy 

c)  Combination both a & b 

17. Are  Taxonomies  based  on  any  standards? 

Yes, taxonomies are based on the regulatory requirements and standards which are to be followed by the companies.   Accordingly, depending on the requirements of every country, there can be country-specific taxonomies. 

18. What  is  an  Instance  document? 

An XBRL instance document is a business report in an electronic format created according to the rules of XBRL. It contains facts that are defined by the elements in the taxonomy it refers to, together with their values and an explanation of the context in which they are placed. XBRL Instances contain the reported data with their values and “contexts”. Instance document must be linked to at least one taxonomy, which defines the contexts, labels or references. 

Thus, in order to concluded the usage and explain the XBRL technology 

which leads to more information exchanges that can be effectively automated by use. This one standard approach leads to the best interest of the company or more so for the international business interests globally that warrant the accuracy of all the financial data for the end users and early collaborative decisions by the companies or those whose interst is involved for acquisition/ rights etc.  


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