EXTENSIBLE BUSINESS REPORTING LANGUAGE (XBRL)
Extensive Business Reporting Language is an open, international standard for improving the ways of financial data communication. According to XBRL International, “XBRL lets reporting information move between organisations rapidly, accurately and digitally”. It is also to note that XBRL uses XML (extensible markup language) coding to organize and define the online data.
How does XBRL work?
Extensive business reporting language uses the concept of taxonomy for marking up and describing business report data. This taxonomy in discussion is specifically referred to as an XBRL taxonomy which in simple terms can be understood as a system of tags. An organisation that aims to adopt XBRL, needs to first build its appropriate taxonomy and then they can use this dictionary to communicate within and outside of the organisation. XBRL-aware applications can easily process the tag and the information contained for reporting and analysis.
Who can use XBRL?
- Financial Regulators
- Companies
- Governments
- Data Providers
- Analysts and Investors
- Accountants
Benefits for XBRL users:
- Faster and improved Timeliness – With the need to rekey data removed, the evaluation process will become simpler
- Better Quantity and Quality of Information – With XBRL reporting, all types of investors will be able to improve the quality of their analyses
- Cheaper Access – Using XBRL means that investors need not purchase data from third-party aggregators to makes their analyses
In a nutshell, data and facts suggest that although, Extensive business reporting language is not essential for every company, it has still become very prevalent and it won’t be long before most companies will choose to report their financial data in this language.
