Technical - You are aware of IFRS. Tell me wat is XBRL and hw it is related to IFRS?

Tuesday, January 5, 2010

Before stating the hint lemme disclose the fact that countries like Australia, Belgium, China, Europe, Germany, Italy, Japan, Korea, Netherlands, Singapore, South Africa, Spain, Sweden, United Kingdom, United States of America are already on the projects of XBRL for Financial reporting.

Hint:

IFRS - International Financial Reporting Standards
XBRL - Extensible Business markup Language

Before going further let's have a look at a simpler approach...

Let's imagine if the whole world has just one language. Is it beneficial?

I think u said a big yess...


again, Let's imagine if the whole world has just one Currency. Is it beneficial?

woop, I kno u said big nope..., even I don't want it, else we professional will av to jump to other jobs. LOL


NOW, let's concentrate on the first case, Uniformity in Language...

see following benefits we gonna reap out of it due to ease in communication...

  • Efficiency
  • Speed
  • Economy
Moving back to technical terms, if we elaborate in easy definition these are as follows:
  • IFRS - Presenting financial statements controlled universal regulation
  • XBRL - Coding Financial Data for easy conversion from one Reporting to other
XBRL is the like universal language in which Financial Data can be coded and read by different softwares.
Lemme elaborate XBRL lil more...
U know HTML (Hyper Text Markup Language)?
No?
ok, U know XML (Extensible Markup Language)?
No?
ok, ok, wait.....
...
...
U kno Excel? yesss... It's coding of data in presentable format.
We can open Notepad files in excel b'coz excel can read them, but Excel files, if opened in Notepad, will look weird.
Same way XML/HTML is a language which is specific coding of data in understandable format which can be read by programmers and layman too. Web sites are coded in XML/HTML. See how good websites look (like this one) though one look at XML file will screw a non-programmer.
XBRL is a form of XML which is specific coding of Financial Data for easy understanding of data by different Accounting and Auditing softwares. It's an open data standard for financial reporting. It's like universal language of Financial Dictionary.
XBRL is internationally promoted by a non-profit consortium of agencies and companies.
More about XBRL, like who is developing the standards and Taxonomies, when and how it was started, I'll elaborate in next post...

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