Is XBRL a programming language?
XBRL is not a programming language but an open standard for the effortless and unhindered transmission of business information. Business entities are required to use software to mark up financial information with XBRL tags or code to represent such information in digital format.
A programming language sets out instructions for a computer to follow and act upon, whereas XBRL is used to make a computer understand various properties of the information being dealt with. While a programming language is intended as a message for the computer, XBRL is intended for a human audience with the computer acting as the mere conduit of the information. However, since a computer understands XBRL, it also facilitates the analysis and comparison of the reported information.
What are the applications of XBRL? OR What is XBRL used for?
The main application of XBRL is the transmission and reception of business information in digital format. However, there are a number of ways in which this is done. At the most basic level, there is the preparation of financial and non-financial documents in XBRL/iXBRL format. These are received by regulatory agencies via software solutions specifically built for validating, collecting, and storing such reports.
Other applications of XBRL stem from the Open Information Model (OIM) – an initiative by XBRL International to modernize and improve XBRL. OIM is aimed at decoupling XBRL from its XML origins and allowing users to select between various formats that facilitate seamless data transfer, including XML. OIM is currently developing the following formats.
- xBRL-CSV – This helps entities to collect high volumes of granular data
- xBRL-JSON – This simplifies the use of XBRL data and achieves higher Interoperability
- xBRL-XML – This is the traditional way of working with XBRL
Want a sneak peek into XBRL International’s OIM initiative? Click here.
Do accountants use XBRL? Who are the users of XBRL?
Accountants need to understand XBRL. To be specific, accountants must familiarize themselves with the XBRL taxonomy or taxonomies used in their geography. That’s because XBRL taxonomy is simply the digital representation of the accounting standards they use. However, accountants are not the sole users of XBRL. The standards are used by regulators, investors, analysts, credit rating agencies, and banks.
The beneficiaries of XBRL reports are regulators, investors, analysts, credit rating agencies, banks, and the reporting-filing entities themselves. Here’s how each of them benefits from XBRL reports. In an earlier section where we explain the advantages of XBRL, we have mentioned how each of these stakeholders benefits from the open data standard.
Which category of companies is exempted from filing financial statements in XBRL?
In most geographies that have mandated XBRL, small and medium enterprises are free to choose whether or not to comply with a digital reporting requirement. The choice is intended to allow these companies a respite from the additional costs associated with XBRL reporting, such as tying up with a software vendor or service provider.