The Financial Professionals Guide to Surviving XBRL in India
XBRL(eXtensible Business Reporting Language) is a language used for electronic communication in business reporting. It offers numerous advantages in preparation, analysis and communication of business details. XBRL ensures cost savings, enhances accuracy and reliability to all individuals who are using the financial details. Here are some of the ways in which financial professionals can use XBRL in India-
Automation of data collection
Once XBRL is adopted, firms can automate the process of data collection. For instance, data from various company divisions with different systems of accounting can be assembled within a short period of time. After the data has been collected in XBRL, various types of reports which use variable data subsets can be produced with little effort. The finance department of a company for instance could promptly generate internal management reports, credit reports meant for lenders etc. As a result, data handling will become automated and time taking error-prone processes will be done away with. But the accuracy of the data will be checked through software.
Usability of financial statement details is increased
XBRL enhances the usefulness of details related to financial details. The necessity to re-key financial data for the analytical purpose can therefore be done away with. By presenting financial statements in XBRL, a firm can enhance its profile by benefiting its investors. It will also satisfy the needs of lenders and regulators who are growing dependent on financial reporting in XBRL. This will play a major role in enhancing business relations.
A high level of flexibility is ensured
Official standards govern financial statements and comprise specific types of information. XBRL is highly flexible. Different organizations can have different reports. Ensuring a high level of flexibility is what makes the creation of digital versions of paper financial statements a big challenge. Accounting standards offer numerous choices for financial professionals. Different firms can report about different things even if they compete with each other. They can aggregate subtotals in various ways and disaggregate data in the manner they prefer. They can also move specific components of financial data and come up with distinct ideas of reporting. All the choices made by the company depend on the accounting team’s judgment. Financial statements are dissimilar to forms.
One thing to keep note is the fact that flexibility isn’t the only domain of financial statements. This is the case with anything which is labeled as a ‘’report’’. Various people present information in their own ways. Financial statements and reports have no similarity with forms. XBRL enables the creation of both.
Comparability and Extensions
Extensions are really strong but they can also cause some problems. They are normally utilized by security regulators to enable the exact presentation of financial statements as prepared. There are many other types of implementation which do not require their usage. The major reason behind this is comparability.
Financial statements are highly flexible but are not comparable by nature. Each firm creates its own disclosure which offers according to them, a clear view of their financial circumstances. Comparison of paper financial statements is tough and XBRL versions of data make that more simple.
Specialists in XBRL and regulatory reports
DataTracks prepares more than 14,000 XBRL statements annually for filing with regulators such as SEC in the United States, HMRC in the United Kingdom, Revenue in Ireland, Eurofiling compliance reports in Europe, ACRA in Singapore and MCA in India. Honed by our experience of preparing more than 172,000 compliance reports, our solutions and services are designed to assure quality, reliability and ease of use.