BANGALORE: Corporate India is learning a new tongue. It's called eXtensible Business Reporting Language (XBRL), a computer language that enables documents to be read and analyzed in ways previously not possible.

Financial statements or any other data prepared in Word, Excel, HTML or PDF formats can only be read but not analyzed or processed. Therefore, making metrics or performing analysis requires manual, time-consuming efforts.

XBRL is a global, freely available, open data standard format that's used for the electronic transmission of financial and non-financial information within organizations and to external users. It makes data machine-readable and therefore it bridges the gap between business systems.

The ministry of corporate affairs (MCA) recently issued a circular mandating companies to file their balance sheet, profit and loss account and other statements for the year ended March 31, 2011, onward using an XBRL format. The first filing deadline is September 30 and failure to adhere to the timeline will result in additional filing fees. This circular marks an important step in ensuring XBRL compliance for financial statements filed by Indian companies, and is part of a series of XBRL initiatives by various regulators.

Ram Iyer, director (accounting advisory services), KPMG, said XBRL implementation does not change any requirements relating to preparation of the financial statements, but merely reflects a change in the manner in which financial statements and other data will be transmitted. Initially, the MCA mandate applies to all companies listed in India and their domestic and overseas subsidiaries, all companies having a paid up capital of Rs 5 crore and above, or companies with a turnover of Rs 100 crore and above.

More companies will be brought under the XBRL regime in a phased manner.

XBRL enables the users' computers to talk to the financial statements and analyse such information. Under the traditional system, a company goes through a time-consuming process of collation to compare their financial performance with those of peer-group companies. "XBRL reporting will be a blessing for the media and analyst community who are looking for comparative performance studies,'' said K Vidyasagar, an accounting consultant.