XBRL, also known as eXtensible Business Reporting Language, is an open standard reporting language that was introduced with the intention of improving the quality of financial data reporting.

It is a form of extensible markup language (XML) that is used across the globe today, and millions of XBRL documents are created each year.

As a result, there are a wide number of regulators who have adopted XBRL over the past decade, including countries such as the UK and the US, and its popularity shows no signs of stopping over the coming years.

Below are just some of the reasons why XBRL is beneficial as a reporting language.

Why use XBRL?

XBRL has the power to change the reporting landscape for the better. For instance:

It offers benefits to a range of users. In fact, anyone that wishes to analyse or compare data can benefit from XBRL, as it makes meaningful information more readily accessible to anyone – from stakeholders in a business to investment analysts and government agencies.

It reduces the need for manual data entry. Many businesses still rely on a large number of manual processes to prepare and review their financial statements, which is not only time-consuming but also carries the risk of a data entry error. XBRL reduces a business’ reliance on such manual input and review processes, meaning more time can be spent on data analysis.

XBRL isn’t just for financial data. It’s a common misconception, but XBRL isn’t just important because it has been made a Statutory requirement by many countries, but it has colossal relevance in terms of changing the Fortune of Financial Reporting.

From the Accountant’s point of view, it will enable them to prepare error-free accounts. Since accounting data are mapped into some recognised taxonomy, all errors are to be sorted out at this stage.

TransparencyIt will digitalise business reporting, hence making it more transparent. XBRL will determine the future of input, process and output of financial information.

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