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Worldwide acceptance of XBRL

 

XBRL is quickly spreading across the world, by way of increasing participation from individual countries and international organizations. It is now preferred as a standard for business and financial reporting worldwide. Many countries are mandating XBRL, for example, China, India, Singapore, Germany, France, Belgium, Chile, Spain and State of Nevada while in others such as Canada, Sweden it is voluntary.

XBRL has gained momentum globally due to adoption by Regulatory authorities. The US Securities and Exchange Commission has played a vital role in accelerating adoption of XBRL in the US. A voluntary filing program for filing returns in XBRL format initiated by SEC in early years is moving towards mandatory filing in a phased manner. The SEC mandated the use of XBRL for public company reporting and other reporting applications as under:

1.   Public Company Reporting – all public companies must file in XBRL format; companies with worldwide public float greater than $5 billion to comply first starting with period ending June 2009; all other large accelerated filers to comply starting with period ending June 2010; all other public companies comply with period ending June 2011

2.   Risk Return Summary Portion of Mutual Fund Prospectus – mutual funds must begin publishing the risk return summary portion of their prospectuses in XBRL format starting January 1, 2011.

3. Credit Rating Agencies – Credit rating agencies are reporting all ratings actions (initial rating, upgrades, downgrades, etc.) in XBRL format starting in August 2009 (180 days after publishing in Federal register).

Japan is also one of the early adopters of XBRL and had started voluntary XBRL reporting program for financial services institutions gradually expanding the range of reports since 2005. The Financial Services Agency (FSA) has implemented a system which requires around 5,000 listed companies and 3,000 mutual funds to submit their financial information in the XBRL format. Many countries around the world are steadily implementing XBRL in their reporting frameworks.

XBRL-IFRS Taxonomy

International Accounting Standards Board published IFRS taxonomy 2009 which is a complete translation of IFRS into XBRL language. In February 2010, it has also published an exposure draft of IFRS taxonomy for Small and Medium Enterprises in XBRL for public comments.

What is XBRL?

eXtensible Business Reporting Language (XBRL) is an emerging technology standard, which promises to bring “better, faster, cheaper” data to organizational decision-making, and specifically to business and financial reporting.

XBRL provides a computer-readable tag to identify each individual item of data, whereby, a business reporting document becomes “intelligent” data, allowing the exchange of business reporting data by encoding the information in a meaningful way.

XBRL enables computer applications to recognize the information in an XBRL document – selecting, analyzing, storing, and exchanging it with other computers and present it in a variety of ways for users.

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