xbrl sai demo.ppt final

8/4/2019 XBRL Sai Demo.ppt Final

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XBRL: FUTURE OF FINANCIAL

BUSINESS



What is XBRL?

XBRL stands for eXtensible Business ReportingLanguage.

It is an open standard, free of license fees.

XBRL is a language for the electroniccommunication of business and financial data.

XBRL is being developed by an international non-profit consortium of approximately 450 majorcompanies, organizations and government agencies.

Government, businesses and business organizationsworking together to exploit a new technology tool toimprove business capacity and profitability.



How does XBRL work?

XBRL has been likened to a bar code for financialstatements.

An electronically readable tag is put on each element

which provides additional context. Tagging is done using standardized taxonomies.

XBRL is an XML (Extensible Markup Language)based information format for business reporting that

provides a methodology for companies to tag (or"mark-up") financial documents.



Tagged data element

If the tag is applied to the gross margin line of theincome statement, a tool enabled to read XBRLwould tell you the line item is gross margin, how it isdefined, what the balance is, what period it covers,what currency it is in, how accurate it is and whatperiod it covers.

The electronic tags applied are standardized and arecontained in taxonomies. Taxonomies are like

dictionaries used by XBRL.



An example to understand XBRL

ABC Limited is required to file the following returns:

o Annual Financial Statements

o Tax Returns

o Returns to the Registrar of Companies

All these returns have some elements which arecommon.

If these elements could be tagged and kept in adatabase, a mere re-arrangement of such elementscould facilitate generation of different reports.



An example of marked up data



Evolution of XBRL

Internet became a success as a conduit for e-commerce, e-mail

HTML language (Hypertext Markup Language)

became the de-facto language to make static webpages.

Problem arose when transaction data had to beshared real-time instead of creating on-linebrochures.

XBRL is a standard evolved out of the extension ofXML(eXtensible Markup Language).



Global Developments in XBRL

Recently US have mandated XBRL vide its final ruleto all large public companies and also to otheraccelerated filers in a phased manner. Thismandatory mass implementation of XBRL would

bring to light the benefits of interactive data. Stock exchanges in China, Japan, Singapore and South

Korea all mandate XBRL data. Japan’s FinancialServices Agency required all public companies to

submit financial statements in XBRL formatbeginning this year.

Latin America, Chile, Colombia, Argentina, Mexico,Brazil, Ecuador, Venezuela have also initiated XBRLinitiatives.



Developments of XBRL in India

October 2008 the Reserve Bank of India (RBI)launched Basel II, an XBRL reporting system to beused by commercial banks for all major filings.

In October 2008 XBRL India, under the leadership ofthe ICAI, published the final version of the GeneralPurpose Financial Reporting XBRL Taxonomy forCommercial and Industrial Companies (C&I).

In early 2009 XBRL India has received a provisional jurisdiction status.

Recently ICAI group on XBRL has finalised the DraftGeneral purpose financial reporting XBRL Taxonomy

for commercial & Industrial Companies.



Developments of XBRL in India

The SEBI has introduced Clause 52 in the Equitylisting Agreement requiring Listing Companies to fileinformation through exchange only through

Corporate Filing Dissemination System (CFDS) The E- Governance project, MCA-21 was introduced

in the year 2006 to enable all companies & theirprofessionals to file their online to ROC



Benefits of XBRL

Professional analysts spend considerable timegathering information and re-keying it into proprietarymodels. Re-keying of financial data for analyticalpurpose can be eliminated.

HOW?

Different subsets of data tagged in XBRL can beused for different types of analysis. Data can beretrieved electronically in a matter of seconds with

additional context. Data collection can be automated offering cost

savings, greater efficiency and improved accuracy.



Why is XBRL the future?

Worldwide regulators are realizing the potential of savings in compliance costs by migrating from paperbased systems to internet based filings.

XBRL being the only XML based freely available standardformat for business information is the natural choice.

Surveys and projects in the recent past have proven thathuge cost and time savings together with high level of data accuracy is ensured through XBRL.

XBRL will not be restricted to only financial statements,its potential is to link all Standard Business Reportingrequirements for each country to minimize compliancecosts



What XBRL Is Not?

Not an Accounting Standard

Not a Chart of Accounts

Not a GAAP Translator

Not a transaction level Protocol



Common misconceptions on Cost

Resistance to adoption of XBRL oftentakes the form of cost or resourceconcerns

However neither of these should be a validconcern as the only cost involved afterdeveloping the taxonomy should be out of

pocket cost for a tagging software. Benefits received from reduction in filing cost

and increased accuracy can overshadowthese cost aspects.



OPPORTUNITIES FOR CHARTEREDACCOUNTANTS

Financial Statement preparation

Mergers and Acquisitions

Compliance Standard setting

Investment & Credit Analysis



XBRL is revolutionary but has to become a de facto industry standard with a critical mass usingits technology before the financial services sector can experience the full benefits.

xbrl sai demo.ppt final

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