XBRl (Extensible Business Reporting Language) is an open standard mark-up language optimized for business information, but not limited to financial and accounting information. It is the variant of XML (Extensible Markup Language) adopting the same syntax and related technologies. The XBRL aids data sharing more than XML does by removing the obstacle of human terminology from the equation.
The XBRL tags are computer-readable, allowing the electronic transmission of data along with resources relating to each concept helping to define their semantic meaning. The capability of XBRL to communicate semantic meaning associated with specific data elements, independent of software application. This makes use of the transmission of business and financial information to multiple company stakeholders and regulators.
How Did XBRL Originate?
XBRL technology arose from the need for reliable and financial related data to be reported to multiple regulatory bodies. The technology created follow issues-
- Duplicated and frequency inconsistent validation methods
- Error-prone and slow manual data collection for analysis
- Introduction of errors as data are transferred along the reporting chain
How Does XBRL Work?
Here are some of the common ways in which XBRL works:
Taxonomy is the grouping of financial concepts (known as “elements”) in which each concept is defined. The taxonomy also defines the relationships between the concepts within the group. Therefore, if we are working with a balance sheet item such as Cash, the taxonomy would include the definition of Cash and would demonstrate how Cash may relate to other balance sheet items.
Tagging is the process of applying the entity’s unique financial data to an element within the taxonomy. The tagging process is performed during the creation of an instance document.
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Interested to know more?
- Why Your Company Needs Data Conversion Services?
- Will technology Remove Human Interface in Data Entry?
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