XBRL is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. XBRL stands for eXtensible Business Reporting Language. It is one of a family of XML languages which is becoming a standard means of communicating information between businesses and on the internet.
XBRL is being developed by an international non-profit consortium of approximately 450 major companies, organizations and government agencies. It is an open standard and free of license fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world.
The idea behind XBRL, eXtensible Business Reporting Language, is simple. Instead of treating financial information as a block of text “as in a standard internet page or a printed document”, it provides an identifying tag for each individual item of data. This is computer readable. For example, Company net profit has its own unique tag.
The introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison. Computers can treat XBRL data intelligently: they can recognize the information in a XBRL document, select it, analyze it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.
Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyze data much more rapidly and efficiently if it is in XBRL format.
XBRL can handle data in different languages and accounting standards. It can flexibly be adapted to meet different requirements and uses. Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software.
Benefit to a Company
- Increases the utility of financial statement information
- The need to re-key financial data for analytical and other purposes can be eliminated
- Companies can automate data collection
- Reports can be produced with minimum efforts
- Removes time-consumption, error-prone processes as well as performs accuracy checks on software
The United Arab Emirates has set up a provisional XBRL jurisdiction under the sponsorship of the Abu Dhabi Securities Exchange (ADX). This is the first XBRL jurisdiction to be set up in the Middle East.
The step was approved by the XBRL International Steering Committee (ISC) in recognition of the UAE’s efforts and aims to advance XBRL. The forming of the jurisdiction will enable the UAE better to recruit local XBRL members and progress the use of the electronic language. A jurisdiction is a local legal entity which has the exclusive right to represent XBRL International (XII) in its area and which is able to provide official support to XBRL projects and initiatives. It is responsible for encouraging the development and adoption of XBRL in its area.
Jurisdictions are initially classed as provisional and become classed as established after achieving targets on growth of membership and other criteria. ADX now has been awarded full established XBRL-UAE jurisdiction.
The new jurisdiction expects to adopt the use of the XBRL technology based on IFRS taxonomy to support financial reporting in XBRL under international standards by UAE companies.
The ADX has taken a leading role in supporting and setting up the jurisdiction. Other leading members include the Central Bank, the Securities and Commodities Authority, the Accounting and Auditors Association and major accounting firms.
Quantum Auditing is fully equipped with professionally trained and qualified staff to provide a full range of content transformation services for businesses Â that include enabling enterprises to convert financial reports into the standardized interactive XBRL format.