ChartAcc

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?

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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.

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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.

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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.

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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?

Before stating the hint lemme disclose the fact that countries like Australia, Belgium, China, Europe, Germany, Italy, Japan, Korea, Netherlands, Singapore, South Africa, Spain, Sweden, United Kingdom, United States of America are already on the projects of XBRL for Financial reporting.

Hint:

IFRS - International Financial Reporting Standards
XBRL - Extensible Business markup Language

Before going further let's have a look at a simpler approach...

Let's imagine if the whole world has just one language. Is it beneficial?

I think u said a big yess...


again, Let's imagine if the whole world has just one Currency. Is it beneficial?

woop, I kno u said big nope..., even I don't want it, else we professional will av to jump to other jobs. LOL


NOW, let's concentrate on the first case, Uniformity in Language...

see following benefits we gonna reap out of it due to ease in communication...

• Efficiency
• Speed
• Economy

Moving back to technical terms, if we elaborate in easy definition these are as follows:

• IFRS - Presenting financial statements controlled universal regulation
• XBRL - Coding Financial Data for easy conversion from one Reporting to other

XBRL is the like universal language in which Financial Data can be coded and read by different softwares.
Lemme elaborate XBRL lil more...
U know HTML (Hyper Text Markup Language)?
No?
ok, U know XML (Extensible Markup Language)?
No?
ok, ok, wait.....
...
...
U kno Excel? yesss... It's coding of data in presentable format.
We can open Notepad files in excel b'coz excel can read them, but Excel files, if opened in Notepad, will look weird.
Same way XML/HTML is a language which is specific coding of data in understandable format which can be read by programmers and layman too. Web sites are coded in XML/HTML. See how good websites look (like this one) though one look at XML file will screw a non-programmer.
XBRL is a form of XML which is specific coding of Financial Data for easy understanding of data by different Accounting and Auditing softwares. It's an open data standard for financial reporting. It's like universal language of Financial Dictionary.
XBRL is internationally promoted by a non-profit consortium of agencies and companies.
More about XBRL, like who is developing the standards and Taxonomies, when and how it was started, I'll elaborate in next post...