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*(This article has been published by the Guwahati Branch in their Souvenir for the National nference of ICAI held at Guwahati,Assam on 16-17December 2011.)

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Synopsis Synopsis

Introduction to XBRL Introduction to XBRL

1.Why we need XBRL?

2.What is XBRL?

3.Who develops XBRL?

4.How XBRL Works?

5.Benefits of XBRL

6.XBRL -Around the World..!

7.Role of Finance Professional in XBRL Filings

8.nclusion

Introduction to XBRL ntroduction to XBRL ntroduction to XBRL

XBRL is the buzz word today in our professional fraternity.

Why not,globally,acunting institutes,mpany

regulators and stock exchanges,trans-national

rporations are mandating filing of financial reports using

XBRL.

In the following paragraphs,we try to unravel the mystery

of XBRL and solve the puzzle –answer a few basic

questions –Why,What,Who,How and Where -put

together these fragments to frame a picture called XBRL.

A.Introduction to XBRL

XBRL is the buzz word today in our professional fraternity.Why not,‘The mpanies (Filing of documents and forms in Extensible Business Reporting Language)Rules,2011’has mandated filing of annual reports of specified class of mpanies using XBRL and as always,something new,a jargon probably never heard before,has been thrown at us to mply with.

In the following paragraphs,we try to unravel this mystery and solve the puzzle –answer a few basic questions –Why,What,Who,How and Where –put together these fragments to frame a picture called XBRL.

1.Why we need XBRL?

Every entity,mmercial or otherwise,is required to prepare and present one or more financial reports to showcase its activities or operations and its financial standing.However,the Financial Reporting model today involves manual processes and is rather disjointed.

Even in the era of advanced automation and Electronic Data Processing,applications or mputer servers seldom interact outside their periphery,because different applications have different data structures and generate reports in closed formats (word,excel or pdf)i.e.,to say,the output of one application is not automatically input in another application for further processing.This gives rise to manual extraction and re-entry of data which is laborious,error prone and adds no value.

The users of financial information –regulatory authorities,stakeholders,lenders,etc.have differing requirements.This leads to a disjointed system of financial reporting requiring the preparer to prepare multiple financial reports for different users.

nsequentially,more time &energy is spent on data mining and data gathering and less is spent on data analytics.With XBRL,we intend to reverse this.

2.What is XBRL?

To begin with,XBRL is an abbreviation for eXtensible Business Reporting Language.

XBRL is an Open Standard XML based language for electronic mmunication of business and financial information and on the Inter

However,XBRL is a more powerful and flexible version of XML which has been defined specifically to to meet the requirements of Business &Financial information.

nversion of Financial Information into XBRL involves tagging of Individual elements or item in the financial report (ncepts)for their electronic dissemination.

These ncepts are defined in a Taxonomy based on a mmon Acunting Framework (say,Indian GAAP,IFRS or US GAAP,etc.).Thus,Taxonomy is basically a Dictionary of financial reporting terms or ncepts.Since national jurisdictions have different acunting regulations and acrdingly separate Taxonomies are developed for different reporting purposes such as Indian GAAP mmercial &Industrial (C&I),IFRS,Bank Regulatory reporting,etc.

XBRL is an Open Standard and is thus free of all licenses and royalty.It is also software and application independent.However,here lies the catch –basically,the Taxonomy or the Data Standard is free –the tools and applications to nvert and /or view the Financial Report are developed by proprietary software vendors and are acrdingly subject to a license fee.

XBRL is extensible.Each entity’s business operations have unique aspects of reporting.An EXTENSION TAXONOMY allows a mpany to create and customize ncepts and elements for their particular reporting practices.Extension taxonomies import then build on,or “extend”the re reporting taxonomy.

This characteristic of extensibility of XBRL provides it with the much needed flexibility and adaptability to differing acunting environments.Without extensibility,XBRL would have been a mere standard chart of acunts.

Explaining the Extension Taxonomy

Figure 1–Explaining the Extension Taxonomy

What XBRL is NOT!