Sebi has already made it mandatory for the top 100 companies to adopt XBRL. On the sidelines of a CII conference on corporate governance, Usha Narayanan, executive director, Sebi said, Sebi would be making XBRL mandatory in phases. To start with, we will ask the mutual fund companies to adopt this reporting tool. The companies filing their financial statements with the board will be required to do so in XBRL compatible form. Sebi is working on making XBRL mandatory for companies in phases and we will expand it gradually. We have already mandated it for the top 100 companies in India .
In US, the house had approved legislation to follow XBRL for government firms which have used the tax payer money for bailout.
The XBRL is a way of electronic communication of business and financial data and is of immense utility to the capital markets and the investing community. XBRL allows the users of financial information to electronically retrieve data with greater assurance of accuracy. According to experts, while XBRL would involve some initial conversion costs for companies, the long-term benefits for investors and the capital markets would be significant.
Jamil Khatri, head of accounting advisory services, KPMG told FE, XBRL filings would ensure that financial data is filed in a standard format and is retrievable electronically. This would also facilitate detailed analysis of the underlying data using standard data analysis tools. This would only involve initial conversion cost but keeping in mind the long term benefits, it is a good move.
XBRL would be beneficial for those who collect business data, including governments, regulators, economic agencies, stock exchanges, financial information companies and the like and those who produce or use it, including accountants, auditors, company managers, financial analysts, investors and creditors. The idea behind XBRL is that instead of treating financial information as a block of text, the XBRL technology would allow electronic tagging of each individual item of data so that computers can work on the information using a set of rules.
ICAI constituted the XBRL group in 2007 for undertaking the development and promotion of XBRL in India. XBRL can also immediately confirm the financial data, highlighting errors and gaps which can immediately be addressed. It also helps the user in selecting and processing the data for re-use.