XML and XBRL – NEXT LEVEL REPORTING LANGUAGE

XML stands for EXTENSIBLE MARKUP LANGUAGE. It is a set of rules, guide­lines, con­ven­tions, what­ev­er we want to call them, for design­ing text for­mats for such data, in a way that pro­duces files that are easy to gen­er­ate and read ( by a com­put­er), that are unam­bigu­ous, and that avoid com­mon pit­falls, such as lack of exten­si­bil­i­ty, lack of sup­port for inter­na­tion­al­iza­tion or local­iza­tion, and platform-dependency.

It is a markup lan­guage just like HTML. XML is a plat­form that enable us an inde­pen­dent plat­form, self-describ­ing, expand­able, stan­dard data exchange for­mat. XML is designed to describe data and to car­ry data, it does not do any­thing, it is cre­at­ed to struc­ture, store, and to send information.

Caus­es to use XML:

Com­put­er sys­tems and data­bas­es may con­tain data in incom­pat­i­ble for­mats. Now the main prob­lem is to make both sys­tem and data­bas­es inter­op­er­a­ble so that they can exchange data. The exchange of data is facil­i­tat­ed by XML, since XML helps to cre­ate data so it can be read by dif­fer­ent appli­ca­tions. XML pro­vides a stan­dard for­mat for data exchange, enabling web ser­vice to pass data from one process to another.

Today XML is being used to exchange finan­cial infor­ma­tion, busi­ness infor­ma­tion, and indus­try infor­ma­tion. It is being used in many busi­ness to busi­ness applications.

XBRL is anoth­er pop­u­lar report­ing lan­guage. It stands for Exten­si­ble Busi­ness Report­ing Lan­guage is freely avail­able and glob­al­ly stan­dard for exchange busi­ness infor­ma­tion. XBRL allows the expres­sion of seman­tic mean­ing com­mon­ly required in busi­ness report­ing. The use of XBRL is to define and exchange finan­cial infor­ma­tion, such as a finan­cial state­ment.  XBRL is being used across a wide range of sec­tors, includ­ing secu­ri­ties reg­u­la­tions, bank­ing, insur­ance, data aggre­ga­tors and tax­a­tion, as well as for non-finan­cial report­ing such as car­bon dis­clo­sure, sus­tain­abil­i­ty efforts and risk reporting.

XBRL’ exten­si­ble nature means that it can be adjust­ed to meet par­tic­u­lar busi­ness require­ments, even at the indi­vid­ual orga­ni­za­tion lev­el. With dif­fer­ent finan­cial state­ments speak­ing dif­fer­ent lan­guages, there will always be an inef­fi­cient analy­sis of finan­cial infor­ma­tion lead­ing to inef­fi­cient com­mu­ni­ca­tion to investors and stake­hold­ers. With enabling of XBRL, doc­u­ments can be pre­pared effi­cient­ly, exchange reli­ably, pub­lish eas­i­ly, analy­sis quick­ly and retrieved by investors sim­ply to enable smarter investment.

Main advan­tages to use XBRL:

• XBRL is a stan­dard that has been accept­ed in world­wide thus it reduc­ing incon­sis­ten­cies in ter­mi­nolo­gies and data formatting.
• XBRL pro­vides high­ly accu­rate data as the data can be both cal­cu­lat­ed and verified.
• XBRL allows much faster and real time prepa­ra­tion of reports and at the same time allows effi­cient, accu­rate and rel­e­vant ways to search data.
• XBRL data once entered can be refused to rep­re­sent the same data in mul­ti­ple ways and mul­ti­ple formats.
• XBRL allows the pre­sen­ta­tion and exchange of data in many dif­fer­ent languages.

How is XBRL Used?

XBRL makes data read­able, with the help of two doc­u­ments-  i) Tax­on­o­my and ii) Instance document.

Tax­on­o­my defines the ele­ments and their rela­tion­ship based on the reg­u­la­to­ry require­ments. Using the tax­on­o­my pre­scribed by the reg­u­la­tors, com­pa­nies have to map their reports, and gen­er­ate a valid XBRL instance doc­u­ment. The process of map­ping means match­ing the con­cepts as report­ed by the com­pa­ny to the cor­re­spond­ing ele­ment in the tax­on­o­my. In addi­tion to assign­ing XBRL tag from tax­on­o­my, infor­ma­tion like unit of mea­sure­ment, peri­od of data, and scale of report­ing etc. has to be includ­ed in the instance doc­u­ment. An XBRL instance doc­u­ment is a busi­ness report in an elec­tron­ic for­mat cre­at­ed to the rules of XBRL.

In today’s envi­ron­ment finan­cial infor­ma­tion in XBRL sub­mit to bank for loan sanc­tioned, bank will take a less­er time to analy­ses infor­ma­tion and quick­ly sanc­tioned loans to the corporates.