Introduction
XBRL stands for eXtensible Business Reporting Language. XBRL is a freely available electronic standard communication software developed to exchange business reports around the world.
Why XBRL is Important?
XBRL supports the preparation, scrutinisation, and transmission of business reports in an effective manner. Not only does XBRL improve efficiency and accuracy of financial data but also lowers the cost involved in the communication of business information.
The use of XBRL has been rapidly increasing over the years with various organisations around the world, implementing the software to communicate their financial and business reports.
XBRL offers a wide range of benefits across all the phases of business analysis and data communication. Reduced costs, accurate and reliable communication of data, and automation, among others are some of the major benefits XBRL offer.
How It Works?
Generally, a company's financial statements are available on the website in plain text format. Traditionally, one would manually have to copy and paste the data to a spreadsheet individually.
However, if the information available on the site was XBRL enabled, one can instantaneously copy the information on the website to an XBRL compatible spreadsheet.
The eXtensible Business Reporting Language was first developed by a group of technologists and accountants who later formed the XBRL International.
At present, India is a member of the XBRL International, established as a separate entity to oversee the activities of XBRL India. The primary goals of XBRL India are:
- To guide companies in adopting and the utilisation of XBRL
- To establish and support Indian taxonomies
- To educate the benefits of eXtensible Business Language Reporting (XBRL) in India.
Future Impact
XBRL is believed to be more extensively implemented and widely adopted by organisations across all levels of data communication. Being a computer-driven software, XBRL can also populate customised reports with pre-defined standards at a faster rate.
