Xbrl - a major step in globalization of integrated financial reporting system

Abstract

The most important role of financial statements is to present a true and fair picture o f the business activities to the stakeholders so that  they can use the information for meaningful decision making. To achieve that goal, stakeholders today are asking for integration of  both financial an d nonfinancial (environmental, social, an d governance) performance measures in order to assess the attractiveness  of a company (Watson et. al 2011). The challenge is to provide high quality information to the stakeholders efficiently an d securely  over the internet throughout the information supply chain. Requirements to file the financial reports in XBRL (extensible Business  Reporting Language) form at by various regulatory agencies around the world represent a crucial step in providing information to stakeholders in an efficient and secure way throughout the information supply chain.  XBRL is developed to address the limitation o f traditional HTML reports, when used for data exchange. Traditional HTML reports are  self-contained an d its information cannot be automatically identified or retrieved by other computer software applications. XBRL  solves this problem by 'tagging' individual item s o f data so that an other computer can understand it an d work with it. The objective o f this article is to provide a review o f XBRL concepts that are important for professional accountants. The article explains the need for its origin in the US an d its global acceptance, applications, advantages, risks, and implementation issues related to XBRL. Our effort is to provide the practitioners an d users o f XBRL with the information about XBRL an d to underscore the need for its implementation. Opportunities an d challenges created by XBRL implementation are also discussed. Current state o f XBRL development in India has been summarized as well.