XBRL – A Major Step in Globalization of Integrated Financial Reporting System

The most important role of financial statements is to present a true and fair picture of the business activities to the stakeholders so that they can use the information for meaningful decision making. To achieve that goal, stakeholders today are asking for integration of both financial and nonfinancial (environmental, social, and governance) performance measures in order to assess the attractiveness of a company (Watson et. al 2011). The challenge is to provide high quality information to the stakeholders efficiently and securely over the internet throughout the information supply chain. Requirements to file the financial reports in XBRL (eXtensible Business Reporting Language) format by various regulatory agencies around the world represent a crucial step in providing information to stakeholders in an efficient and secure way throughout the information supply chain.XBRL is developed to address the limitation of traditional HTML reports, when used for data exchange. Traditional HTML reports are self-contained and its information cannot be automatically identified or retrieved by other computer software applications. XBRL solves this problem by ‘tagging' individual items of data so that another computer can understand it and work with it. The objective of this article is to provide a review of XBRL concepts that are important for professional accountants. The article explains the need for its origin in the US and its global acceptance, applications, advantages, risks, and implementation issues related to XBRL. Our effort is to provide the practitioners and users of XBRL with the information about XBRL and to underscore the need for its implementation. Opportunities and challenges created by XBRL implementation are also discussed. Current state of XBRL development in India has been summarized as well