IAS Economy Practice Question . 28
Recently, the term XBRL was in news. What is XBRL?
[A]It’s a new computer language
[B]It’s a new software designed for businesses
[C]It’s a new international accounting norm adopted recently
[D]None of the above
Answer: It’s a new computer language
XBRL refers to eXtensible Business Reporting Language, which is a computer language that enables documents to be read electronically. In the last week of March 2011, India’s ministry of corporate affairs (MCA) had issued a circular mandating all listed companies and certain unlisted companies to file their balance-sheets and profit-and loss accounts (financial statements) for the year ended March 31, 2011, onward using XBRL.
1. Financial and other reports in Microsoft Word and Excel, HTML, etc, cannot be automatically identified or retrieved for computerized analysis or further processing. XBRL solves this problem by ‘tagging’ individual items, which makes documents machine-readable . For example, several sets of financial statements could be tagged to a common dictionary of terms (taxonomy).
2. Once tagged, all information can be analyzed automatically, saving significant time in collating such financial information.
3. XBRL thus allows transparent filing of financial statements and provides reliable information to investors and regulators — such as RoC, Sebi, RBI and stock exchanges — facilitating improved monitoring.
?Similarly, XBRL is also beneficial in non-financial statement uses since it is capable of encoding any information. For example, a company’s management can use XBRL to collect and analyse information relating to supplier data, customer application forms, project information , employee data and MIS data.