XBRL and more...

Saturday, January 1, 2011

Hope the previous sharepoint on XBRL in layman's language was helpful in giving basic purpose of bringing XBRL to business.

Before going forward lemme again elaborate XBRL in short detail as follows:
MP3 files are music files in specific format which can be created and played on most devices or softwares.
Same way XBRL is a universal coding format for Financial Information which can be instantly and easily converted and shared in any country reporting format.

Now, lemme go on a bit "Definition-wise" side of XBRL...

  • What?
  • Why?
  • How?

What is XBRL?

It's a coding language for sharing Financial Information in electronic form. It's like Extensible Markup Language (XML) where XML is for any type of data and XBRL is specifically for Financial Reporting.

e.g. Electronic data format of "Statement of Financial Position" from one software can't be uploaded in any other software unless coding for report is same for both.


Why XBRL is required?

To furnish or compare, electronic data of Financial Information in easily readeable format. In some cases it will be compulsory to report under XBRL format for filing data with Govt. departments.

So it has following reasons of adoption:
 - Efficiency in reporting and Time and Cost saving
 - Legal requirement

e.g. U.S. Securities and Exchange Commission (SEC) rules require some Public companies to submit their financial statements in the XBRL interactive data format for the fiscal periods ending on or after 15 June 2009.


How to use XBRL?

Third party softwares and utility tools are available to convert data from normal format to XBRL format. Even any existing accounting software can be modified or upgraded to produce XBRL reports.

e.g. XBRL programmers will usually provide technical support or guidance for those taking part in XBRL adoption.


Wait for my next sharepoint to elaborate on followings:

How IFRS is related to XBRL?
How to Join XBRL?
What are Taxonomies and Jurisdictions?
What are the technicalities required thereof?


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