XBRL (eXtensible Business Reporting Language) is a puter language that enables documents to be read electronically. For example, financial reports in Word, Excel, HTML etc cannot automatically be identified for puterised analysis or further processing. Xbrl solves this problem by ‘tagging’ individual items of data in a way that a puter can understand and work with.

By using xbrl, panies can automate the processes of data llection. A pany finance division, for example, uld 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 error-prone manual processes, but the data can also be checked by the software for auracy. Small businesses can benefit alongside large ones by standardising and simplifying their preparation and filing of information.

Users of data in the xbrl format can automate its handling, cutting out time-nsuming and stly llation and re-entry of information. Software can also validate the data, highlighting errors and gaps that can immediately be addressed. Human effort can switch to higher, more value-added aspects of analysis, review, reporting and decision-making. In this way, investment analysts can save effort, greatly simplify the selection and parison of data, and deepen their pany analysis. Investors can save sts and speed up their dealings with borrowers. Regulators and ernment departments can assemble, validate and review data much more efficiently than they uld previously.

The introduction of xbrl for banking regulation in the US has proved a major suess. More than 8,000 banks have been filing quarterly Call Reports in xbrl since October 2005. Banking regulators on the Federal Financial Institutions Examination uncil say its xbrl system has provided major benefits in efficiency, data validation and speed. The number of errors that stood at a staggering 18,000 viz 1,000 basic arithmetic errors (like the sum of the individual ponent not cross tying with the over all total) and 17,000 errors in business rules (like the check for the opening balance not exceeding the ending balance), were all ironed out effectively, thus improving the quality of data immensely. The processing st that stood at $65 million over a period of 10 years came down to $39 million, the processing time came down from 60-75 days to 2 days, the data is now stored at a single location and automation provided for greater flexibility.

To bring these benefits to India, on March 31, 2011, the ministry of rporate affairs (MCA) issued a circular mandating that all listed panies and certain unlisted panies file their balance sheets, and profit and loss acunts (financial statements) for the year ended March 31, 2011 onward using an xbrl format. This circular marks an important step in...