By Dr. K.S.Muthupandian, M.Com., M.B.A., FCMA, Ph.D.

What is XBRL?

X-eXtensible B-Business R-Reporting L-Language

XBRL is a XML(extensible mark up language) base computer language which is a new way of communication of business information in which business reports are converted from paper format to machine readable format.

What is XBRL?
XBRL is a freely available electronic language for financial

reporting. XBRL provides an XML-based framework that the global business information supply chain can use to create, exchange, and analyze financial reporting information including, but not limited to, regulatory filings such as annual and quarterly financial statements, general ledger information, and audit schedules. XBRL is not about establishing new accounting standards but enhancing the usability of the ones that we have through the digital language of business. XBRL will not require additional disclosure from companies to outside audiences.

Financial Reporting Process Without XBRL

Printed Financials Regulatory Filings Web Site Tax Return Trade Filings

Accounting System Explanatory Text Third Party Information

Financial Reporting Process With XBRL

Accounting System
Explanatory Text Third Party Information

XBRL Documents

Printed Financials Regulatory Filings Web Site Tax Return Trade Filings

Why XBRL?
In the century of computerization and with introduction of

International Financial Reporting Standards, reporting of entities financial information has acquired new importance. Reporting of financials is like a sharp edged sword in which balance has to be maintained between confidentiality and transparency. In the past efforts has been made by various regulators to develop a mechanism of transparent reporting system with least resource wastage. Still reporting process in most of the cases remains complex, companies are required to collate, check, validate and reconcile the volume of data to arrive at reporting package. XBRL has emerged as an answer to all the queries. It is a complete package which satisfies all the needs and can be a revolution in the field of financial Reporting.

HISTORY OF XBRL
o Begin in 1998 by Charles Hoffman in USA. o August 1999 Steering Committee was formed with Big 4s
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as its member along with others October 1999 First Meeting took place in New York. In 2001 first XBRL International conference was held in London and since then number of countries have adopted XBRL October 2001 XBRL jurisdictions were formed in US, Australia, Canada, Germany, Japan , UK, Netherland. In 2011, the Ministry of Corporate Affairs has issued circular mandating certain companies to file their financial statements from the year 2010-11 using an XBRL format.

What is XBRL Used For?

An XBRL-based financial statement is a digitally enhanced

version of paper-based financial statements, which include the balance sheet, income statement, statement of equity, statement of cash flows, and the notes to the financial statements as well as the accountant's report. XBRL documents can be prepared efficiently, exchanged reliably, published more easily, analyzed quickly, retrieved by investors simply, and enables smarter investments. Other potential XBRL applications include tax returns, regulatory filing, general ledger, authoritative literature, and management reporting.

What does XBRL have to offer?

o Adopted worldwide o Designed to be compatible with other applications o Once entered, data does not have to be re-entered o Uses standardized descriptions which reduces the

possibility of error o The technology is ideal for web-enabled applications and those who gather financial information over internet. o Generate various outputs and reports based on a single set of data o Cost savings to be gained from input efficiency, preserving accuracy and integrity

How XBRL works?

XBRL makes the data readable, with the help of two documents

Taxonomy and instance document. Taxonomy defines the elements and their relationships based on the regulatory requirements. Using the taxonomy prescribed by the regulators, companies need to map their reports, and generate a valid XBRL instance document. The process of mapping means matching the concepts as reported by the company to the corresponding element in the taxonomy. In addition to assigning XBRL tag from taxonomy, information like unit of measurement, period of data, scale of reporting etc., needs to be included in the instance document. XBRL is an application of XML to business information and uses tags or structure to describe the data, making it immediately reusable, interactive and intelligent. Each data of business report is tagged with the help of software from the taxonomy.

How data becomes XBRL compliant

XBRL makes the data machine readable, with the help

of two documents taxonomy and XBRL instance document. Taxonomy defines the elements and their relationships. Using the relevant taxonomy, a company can map data and create an XBRL document. This XBRL document thus becomes machine readable and can be automatically read and analysed by users.

What are the Benefits of XBRL for Financial Statements?

With XBRL, information will be entered once and the same information will be "rendered" as a printed financial statement, an HTML document for a Web site, a raw XML file, or a specialized reporting format such as periodic banking and other regulatory reports.

Specific benefits of XBRL

Allows users to quickly access the information they need Permits the automatic and reliable exchange of financial

information Does not require a change to accounting standards or disclosure policies Eliminates the need to reenter data for different users Lowers the cost to prepare and distribute financial statements Allows accountants to quickly and easily consolidate and scrutinize internal data for use in financial reports Enhances transparency of financial reporting

Who will benefit from using XBRL?

Companies who prepare financial statements: More

efficient preparation of financial statements because they will be created one time and rendered as printed reports, on Web sites, as Edgar filings, or as other regulatory filings. Analysts, Investors, and Regulators: Enhanced distribution and usability of existing financial statement information. Automated analysis, significantly less re-keying of financial information from one form into another form, receiving information in the format you prefer for your specific style of analysis.

Who will benefit from using XBRL?

Financial publishers and data aggregators: More efficient

data collection lowers operating costs associated with custom, idiosyncratic data feeds and reducing errors while concentrating on adding value to the data and increasing transaction capacity Independent Software Vendors: Virtually any software product that manages financial information could use XBRL for its data export and import formats, thereby increasing its potential for full-interoperability with other financial and analytical applications.

Requirements for the Successful Deployment of XBRL

Creation of a specification that is the same for all

companies that is consistent from one financial statement to another. An application that will allow the creation of financial statements tagged with XML that adhere to the specifications. Style sheets which render information for a specific or variety of formats. XBRL for financial statements will provide agreement on the terms used by establishing uniform categories for financial data. Yet, the system remains flexible to accommodate any companys internal environments, processes, systems, and even styles.

MCA Circular Applicability

General Circular No. 09/2011, Dated the 31.03.2011 The following companies are required to file the financial statements in XBRL form from the year 2010-11: All companies listed in India and their Indian subsidiaries; All companies having a paid up capital of INR 5 crore and above All companies having a Turnover of 100 crore and above. The circular also contains by way of an annexure, a host of valuable information about XBRL in the form of Frequently Asked Questions (FAQs) about XBRL. As per the said circular, taxonomies for Indian companies are developed based on the requirements of Schedule VI of Companies Act, Accounting Standards, SEBI Listing requirements, etc.
o o o o

Scope of filing
Filing covers the entire annual financial statements,

the directors report and the auditors report. The XBRL taxonomy (dictionary) is based on the existing Schedule VI of the Indian Companies Act, and the currently prevailing Indian Accounting Standards. Accordingly, XBRL implementation does not change any requirements relating to preparation of the financial statements, but merely reflects a change in the manner in which the financial statements will be transmitted to the regulators.

Applicability
Any company not filing financial statements in

compliance with Schedule VI of the Companies Act is exempt. For example, companies governed by Electricity Act, Banking Regulation Act or the Insurance Act are exempt in current phase NBFCs are exempt despite the fact that they prepare Schedule VI financial statements, since a separate taxonomy is planned

Applicability
Non-exempt subsidiaries of exempt parents (e.g.

shared service center or broking subsidiary of a bank) are covered since such companies file Schedule VI financial statements and are covered by the current taxonomy Power companies that prepare financial statements in accordance with Schedule VI are covered Voluntary filing encouraged for companies not currently meeting criteria

Time Limit for filing

General Circular No. 01/2013, Dated the 15.1.2013

The time limit to file the Financial Statements

(Balance Sheet and Profit and Loss Account) for the year 2011-12 [including the overdue reports relating to any previous year(s)] with the Central Government in the XBRL mode, without any penalty, within 30 days from the due date of Annual General Meeting of the company or by February 15, 2013, whichever is later.

Filing of Cost Audit Report

General Circular No. 02/2013, Dated the 31.1.2013

All cost auditors and the companies concerned are

allowed to file their Cost Audit Reports and Compliance Reports for the year 2011-12 [including the overdue reports relating to any previous year(s)] with the Central Government in the XBRL mode, without any penalty, within 180 days from the close of the companys financial year to which the report relates or by February 28, 2013, whichever is later.

Thank You