XBRL (eXtensible Business Reporting Language)

MoneyBestPal Team
A software standard that was developed to improve the way in which financial data is communicated, making it easier to compile and share this data.
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A software standard called eXtensible Business Reporting Language (XBRL) was created to enhance the communication of financial data and make it simpler to compile and exchange this data.

Extensible Markup Language (XML), a specification used for online data organization and definition, is the foundation of XBRL. Each item of financial data in XBRL is identified by tags, allowing an XBRL-compatible application to utilize it programmatically.

What is XBRL?

XBRL, or eXtensible Business Reporting Language, is a reporting language. It is an open, international system for exchanging commercial information. The expression of semantic meaning, which is frequently needed in corporate reporting, is possible using XBRL. The standard, which was based on XML at first, now includes reporting in JSON and CSV formats in addition to its initial XML-based syntax.

XBRL makes it possible to create standardized reports that can be quickly interpreted and processed by a variety of users, including auditors, managers, analysts, investors, and regulators. In addition, XBRL makes it easier to compare and analyze data from many organizations, markets, nations, and eras.

How does XBRL work?

The way that XBRL organizes financial data in a report is by utilizing tags to label each item. A taxonomy, or collection of guidelines, which establishes the meaning and organization of the data, defines these tags. An accounting standard, such as IFRS or U.S. GAAP, or a particular reporting obligation, like Basel III disclosures or SEC filings, might serve as the foundation for a taxonomy.

Two essential parts make up an XBRL report: a taxonomy and an instance document. A report's actual data and values are included in an instance document along with references to the tags that describe them. A taxonomy includes information such as labels, references, calculations, definitions, and presentations in addition to the definitions and relationships of the tags.

An example of an XBRL tag is <us-gaap:Assets>, which represents the total assets of a company according to U.S. GAAP. An example of an instance document element is <us-gaap:Assets contextRef="FY2020" unitRef="USD" decimals="-6">100000000</us-gaap:Assets>, which means that the total assets of the company are 100 million U.S. dollars as of the end of fiscal year 2020.

An example of a taxonomy element is <link:labelArc xlink:from="us-gaap_Assets" xlink:to="label_Assets" xlink:role="http://www.xbrl.org/2003/role/label" xlink:arcrole="http://www.xbrl.org/2003/arcrole/concept-label"/>, which means that the tag <us-gaap:Assets> has a label "Assets" in English.

Why is XBRL important?

XBRL is important because it improves the quality, efficiency, and transparency of business reporting. By using XBRL, business information can be:
  • More accurate: Data entry and transmission mistakes and inconsistencies are less likely to occur when using XBRL.
  • More timely: Data may be reported and sent more quickly and frequently by using XBRL.
  • More accessible: Users of XBRL can access and download data in a wide range of languages and formats.
  • More comparable: Users can compare and evaluate data from various sources and dimensions using XBRL.
  • More interactive: Users can personalize their views of data and delve down into specifics using XBRL.

XBRL can benefit various stakeholders involved in business reporting, such as:
  • Regulators: Regulators can more efficiently and effectively gather, validate, and monitor data from regulated entities with the aid of XBRL.
  • Investors: XBRL can make it simpler and more dependable for investors to access and analyze data from various companies and markets.
  • Analysts: Analysts can conduct more complex and thorough company and industry research and valuations with the use of XBRL.
  • Auditors: With the aid of XBRL, auditors can swiftly and precisely check and audit data.
  • Managers: Managers may prepare and present data more precisely and consistently with the use of XBRL.

XBRL is developed and maintained by XBRL International, a global non-profit consortium of over 600 organizations from various sectors and regions. The technical parts of XBRL are defined in the XBRL specifications, which are published by XBRL International along with recommendations and best practices for using XBRL. Additionally, XBRL International is in charge of the creation and upkeep of XBRL taxonomies, which specify the precise components and connections for disclosing various kinds of business data.