org/in
p-ISSN: 2394-8906
ARTICLE INFO
ABSTRACT
Article History:
Key words:
XBRL (eXtensible Business
Reporting Language),
Accounting,
Companies Act.
JEC Classification:
Copyright 2016 IJASRD. This is an open access article distributed under the Creative Common Attibution
License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original
work is properly cited.
INTRODUCTION
XBRL is a data-rich dialect of XML (Extensible Markup Language) which is the
universally preferred language for transmitting information via the Internet. XBRL
provides a common, electronic format for business reporting. It helps to communicate
financial information over the web faster, easier, and more reliable. It was developed
specifically to communicate information between businesses and other users of financial
information, such as analysts, investors and regulators. It does not change what is being
reported but it only changes the manner of reporting. XBRL helps in enhancing
business performance by improving transparency and accountability through the use of
digital data exchange.
In XBRL, information is broken down into unique items of data (e.g., total assets
= 100). These data items are then assigned mark-up tags that make them computerHow to cite this article: Harikumar, G. (2016). An Understanding of XBRL Procedures for Improving the Future of
Business Reporting. International Journal of Advanced Scientific Research & Development (IJASRD), 03 (03/I), [Special
Issue Sep 2016], pp. 109 117.
readable. For example, the tag <Assets>100</ Assets > enables a computer to
understand that the item is Assets, and it has a value of 100.
Information that has been tagged using XBRL (XBRL tags) will be used
intelligently for recognizing, processing, storing, exchanging and analyzing by the
computers using software. XBRL tags are formed in a universally-accepted way and
they can be read and processed by any computer that has XBRL software.
XBRL tags are defined and organized using categorization schemes called
taxonomies.
1.1 Review of Literature
First article appeared in Accounting Technology (Cohen 1999) suggesting that
XML offered many efficiency benefits for accountants.
The International Journal of Digital Accounting Research (Bonsn 2001)
suggested that digitalizing financial statements would play a key role for the
development of the Global European Stock Market.
There are three types of XBRL taxonomies: general-purpose financial statement
taxonomies, special-purpose regulatory reporting taxonomies, and the general ledger
taxonomy. General purpose financial statement taxonomies are specifically designed for
companies preparing their financial reports in XBRL format. Special purpose regulatory
reporting taxonomies represent accounting regulations prescribed by different countries.
XBRL-GL is a special purpose taxonomy. It is designed to tag information in enterprise
resource planning (ERP) systems ranging from business event to end reporting,
enabling efficient handling of business information within an organization, facilitating
internal reporting, and leading to an environment of continuous monitoring and
continuous auditing (Baldwin et al. 2006).
Roohani (2007) argues in his paper about how XBRL would facilitate corporate
governance and provide transparency to employees, investors and creditors, and
regulators.
Premuroso and Bhattacharya (2008) examined that firm performance factors
including liquidity and firm size are also associated with the early and voluntary XBRL
filing decision.
Documents that are prepared with XBRL software stay connected not just to the
sources of the content but to additional resources that enable the reviewers to make
informed decisions (Mueller, 2009).
The SECs 2009 mandate for XBRL use in financial reporting has made XBRL an
even more popular research area.
1.2 Statement of the Problem
XBRL filing helps the computers to interpret the financial statements of all the
nations worldwide in a computer understandable readable form. The world is shrinking
and many businesses are going global. Companies having audited financial statements
in numerical format lose to their competitors in the global market since they cannot
enter the international arena for fund mobilization without adhering to Global XBRL
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procedures. XBRL accounting statements would help Companies to stick to the global
standards offering high levels of transparency and universal acceptability. XBRL would
become the future of the Companies in the days ahead.
1.3 Need for the Study
XBRL filing has been given more importance in Companies Act of 2013.
Understanding the advantages of XRL and the intricacies involved would help many
businesses to patronize XBRL filing patterns. The countries adopting XBRL filing in the
global market is analyzed.
1.4 Research Gap
Though previous studies have been done on XBRL Filing patterns worldwide,
this paper gives more attention on understanding the advantages of XBRL and its
applicability to Indian Companies as on date as per the current legal enactments.
1.5 Research Objectives
To understand the concept of XBRL filing
To examine the applicability of mandatory filing in XBRL format for Indian
Companies
To know the advantages of XBRL filing
RESEARCH METHODOLOGY
(i) Sources of Data Collection: The study is an exploratory research based on
secondary method of data collection. The secondary data includes information collected
from various journals, government reports, newspapers, websites and magazines.
(ii) Tools of Analysis: Case study analysis is used to analyze the advantages,
applicability of XBRL and the countries adopting international XBRL filing.
2.1 Limitations of the Study
Primary source of data collection is difficult since Companies adopting XBRL
pattern are not present in large numbers in our Country.
This topic is vast and the time for conducting this study was very limited.
This topic is fairly new and hence source of information for making references
where very limited.
2.2 Background of XBRL
XBRL concept was articulated in 1998 by Charles Hoffman, and then known as
XFRML (eXtensible Financial Reporting Mark up Language). XBRL is a world-wide
standard, developed by an international, non-profit-making consortium, XBRL
International Inc. (XII).
2.3 XBRL in India
The XBRL wave started in India in late 2007 and the four major regulators
involved in the adoption of XBRL are the following entities:
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Ministry of Corporate Affairs mandated that the XBRL regulatory reporting include
all companies (in phases) from 31st March 2011 who would adopt the Commercial and
Industrial Taxonomy developed by ICAI (The Institute of Chartered Accounts of India).
Ministry of Corporate Affairs (MCA) vide 9th September 9, 2015 notification has issued
the Companies (Filing of Documents and Forms in Extensible Business Reporting
Language) Rules, 2015. The following class of Companies shall file their financial
statement and other documents under section 137 of the Act, with the Registrar in eform AOC-4 XBRL given in Annexure-l for the financial years commencing on or after
1st April' 2014 using the XBRL taxonomy given in Annexure II, namely:(i) all companies listed with any Stock Exchange(s) in India and their lndian
subsidiaries; or
(ii) all companies having paid up capital of rupees five crore or above;
(iii) all companies having turnover of rupees hundred crore or above; or
(iv) all companies which were hitherto covered under the Companies (Filing of
Documents and Forms in Extensible Business Reporting Language) Rules, 2011:
Provided that the companies in Banking, Insurance, Power Sector and Non
Banking Financial companies are exempted from XBRL filing.
A company required to furnish cost audit report and other documents to the
Central Government under sub-section (6) of section 148 of the Act and rules
made there under shall file such report and other documents using the XBRL
taxonomy given in Annexure-III for the financial years commencing on or
after 1st April, 2014 in e- CRA-4 specified under the Companies (Cost Records
and Audit), 2014
Reserve Bank of India (Indias monetary regulator) has implemented the XBRLbased regulatory filings for banks using the Internet and Indian Financial Network
(INFINET). All the scheduled banks in India were required to file using XBRL
standards. Central Repository for Information on Large Credits (CRILC) has been set
up to collect, store and disseminate credit data with respect to borrowers having
aggregate fund-based and non-fund based exposure of Rupees 50 million and above.
With effect from September, 2014, all commercial banks had to mandatorily report their
credit information. The implementation of 97 returns out of nearly 225 different returns
have been done in XBRL format for the banks and non-bank entities.
SEBI is in the process of implementing a Unified Platform for Electronic
Reporting and Dissemination named as SUPER-D, which will be done using XBRL data
standards. XBRL (eXtensible Business Reporting Language) technology based platform
will be used for reporting by Listed Companies, Mutual Funds and other SEBI
registered intermediaries. SEBI formed the XBRL Technical Advisory Committee (XTAC) for guiding its efforts in the development of the platform.
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stop poor quality information being sent to a regulator or third party, by being
run by the preparer while the report is in draft.
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CONCLUSION
XBRL is not only meant for regulatory purposes but has its use in other fields of
business as well. XBRL helps to pass on business information from information
providers to information consumers in a consistent and reliable manner. XBRL
addresses the problem of data integrity, timeliness and reusability.
Different reports can be prepared easily and quickly. But initial, the cost involved is
little high and consumes more time. XBRL helps in satisfying the requirements of all
stakeholders involved in business namely shareholders, creditors, employees and the
regulatory authorities at large.
So, XBRL would enable accuracy and transparency leading to an efficient economy in
future.
Make quicker and easier decisions with better data reporting
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