The ministry of corporate affairs (MCA), Government of India (GoI) has resolved to implement Extensible Business Reporting Language (XBRL) for all companies in India from 2011, reports Financial Express.
The following class of companies have to file the Financial Statements in XBRL Form only from the year 2010-2011 :-
(i) All companies listed in India and their subsidiaries, including overseas subsidiaries;
(ii) All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above .
Currently, the top 100 companies are already using the XBRL format for financial reporting. In US, the house had approved legislation to follow XBRL for government firms which have used the tax payer money for bailout.
The XBRL is an electronic format for communication of business and financial data that allows the users of financial information to electronically retrieve data with greater assurance of accuracy. According to experts, while XBRL would involve some initial conversion costs for companies, the long-term benefits for investors and the capital markets would be significant.
This would only involve initial conversion cost but keeping in mind the long term benefits, it is a good move.” The ministry would be working with the accounting regulator, Institute of Chartered Accountants of India for the application of the reporting language to the MCA 21 database.”
The companies which are converging with the IFRS from Apr. 1, 2011 will have to incur an additional cost of complying with the advanced reporting language tool, XBRL.
XBRL would be advantageous to all those who gather business data, including governments, regulators, stock exchanges, financial information companies, economic agencies and the likes and those who produce or use it including accountants, auditors, company managers, financial analysts, investors and creditors. XBRL can also immediately confirm the financial data, highlighting errors and gaps which can immediately be addressed. It also helps the user in selecting and processing the data for re-use. ICAI constituted the XBRL group in 2007 for undertaking the development and promotion of XBRL in India.
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