XBRL Adoption Worldwide
XBRL (eXtensible Business Reporting Language) is an open technology standard for financial reporting, based on XML standards.Â XBRL taxonomy can be developed in any language using XML standards. It can be used to tag metadata for collection, dissemination, analysis, archival, achieving transparency and uniformity in reporting. Several countries, supported by their respective regulators, accounting bodies and stock exchanges have adopted XBRL as a replacement to paper/PDF filings.
XBRL vs iXBRL
On a global level, interactive financial data projects can be implemented either in XBRL or iXBRL format. While XBRL files can be read only by the computers, iXBRL renders human readability as well. iXBRL is a HTML document that displays financial statements with XBRL tags embedded within. XBRL files can be rendered to humans only by viewing it through the software.
Securities Exchange Commission (SEC) in the United States, Her Majestys Revenue and Customs (HMRC) in the UK, Ministry of Corporate Affairs (MCA) in India, Companies House of Singapore, Australian governments SBR project and many others have already implemented XBRL reporting standards in their jurisdiction.
Forthcoming XBRL projects
Canadian Securities Administrator, Irish Revenue Commissioners, Companies House of United Kingdom, UAE Securities administrator, BASEL II reporting requirements by various banking regulators across the globe, Insurance regulators and several other local administrators have already initiated the XBRL implementation strategy.
Experience from the past
Though the initial implementers around the globe had faced a few challenges, the followers are now finding it relatively easy to implement their strategy.
In the United States, SEC had initiated XBRL program in 2008 and had a long gestation period in covering all its registrant companies. They had a phased-in approach involving the size of the company and depth of tagging XBRL data. As a result, the output instance documents were of high quality. Â Â SEC continues to have both “ HTML and XBRL filings.
In the United Kingdom, HMRC had a very short gestation period in its implementation. The phased-in approach did not exist, but there was a significant relaxation to the level of tagging XBRL data for the first 2 years.Â Most importantly, HMRC has opted for iXBRL (Inline XBRL). This file serves dual purposes “ machine and computer readability.
In India, MCA has reached out to a smaller group of companies with some relaxation to the level of tagging that is required. The gestation period was one of the shortest ever in the history of the XBRL program. It is anticipated that MCA would expand this to more companies in the near future.
Extending standard taxonomy
Financial reporting taxonomy is a dictionary containing most of the accounting terms. When filers do not find the financial terms that are specific to their entity, creating a custom taxonomy (known as Extension) by adding the accounting concepts, would serve the purpose. Â While SEC accepts extensions, HMRC & MCA do not permit extensions. MCA on the other hand recommends filers to either tag such items to a common accounting repository concept called Other item.
XBRL organization (www.xbrl.org), is a non-profit organization that consists of more than 600 companies and agencies that promote and support XBRL adoption worldwide. They frequently monitor the developments and are responsible in dictating the XBRL standards.
DataTracks India is part of DataTracks Global, leaders worldwide in preparation of financial statements in XBRL and iXBRL formats for filing with regulators. DataTracks Global prepares more than 12,000 statements a year in XBRL format for regulatory filings with SEC in United States, HMRC in United Kingdom and MCA in India and for several other developing jurisdictions. DataTracks Global is a unit of DataTracks Services Limited(www.datatracksglobal.com).Â To find out more, visit www.datatracks.in or send an email to firstname.lastname@example.org.
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