XBRL stands for eXtensible Business Reporting Language. It is a language for the electronic communication of business and financial data worldwide. As one of the family of "XML" languages, it is becoming a standard means of communicating information between businesses and on the Internet.
XBRL is managed by an international non-profit consortium of over 600 companies, organisations and government agencies. It is an open standard, free of license fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. (Source: http://www.xbrl.org/)
Providing major benefits in the analysis and communication of business information, XBRL offers cost savings, greater efficiency, and improved accuracy and reliability to all those involved in using financial data.
How XBRL works
Under XML, identifying tags are applied to items of data so that they can be processed efficiently by computer software. XBRL is a powerful and flexible version of XML which has been defined specifically to meet the requirements of business and financial information. It enables unique identifying tags to be applied to items of financial data, such as ‘net profit’. However, these are more than simple identifiers. They provide a range of information about the item, such as whether it is a monetary item, percentage or fraction. XBRL allows labels in any language to be applied to items, as well as accounting references or other subsidiary information.
XBRL can show how items are related to one another. It can thus represent how they are calculated. It can also identify whether they fall into particular groupings for organisational or presentational purposes. Most importantly, XBRL is easily extensible, so companies and other organisations can adapt it to meet a variety of special requirements.
XBRL works by adding “information about information”, through the use of “metadata” or “descriptive data” (tags). This allows computers to relate to or communicate with one another without human intervention.
International Adoption of XBRL
XBRL financial reporting is implemented in many other countries such as the United States, the United Kingdom and closer to home, Japan, China and India. It is also gaining much traction amongst the stock exchanges and regulators globally in a move to harness greater value from submitted business and financial information.
Unlocking the Value of Business Data with XBRL
A key advantage of XBRL is greater transparency as data can be sliced and diced almost immediately for analysis with software tools. This affords a far wider scope and complexity for business analytics than manual comparison of financial statements.
You will be able to tap on a new source of data analysis, to help to interpret financial information, develop benchmarks, conduct peer and industry comparisons and recommend ways to improve operational efficiencies and increase the bottom line. With more companies filing in full XBRL, analysis of business data can be more efficiently generated and made available to the business community.
Locally, online analytical tools like the Singapore Financial Direct provide such business analytics capabilities. ACRA has also developed the Corporate Compliance and Financial Profile (CCFP), an electronic report that provides a holistic and quick overview of a company in terms of its compliance status, financial profile and basic profile information. You may tap on such XBRL enabled data to enhance your business decision making process.
Free Data Analysis Available on BizFinx
For you to experience the business value of XBRL enabled data, ACRA is offering the Free Data Analysis (FDA) report via the BizFinx portal. No login is required.
Using a set of financial ratios (revenue growth, net profit margin, return on assets, total asset turnover), data analysis will be provided in the following ways:
- Trend analysis up to 5 years on the performance of a selected company; and
- Benchmarking your selected company’s performance against the industry and your selected peers (up to 6 companies).
To use the FDA tool, please visit the BizFinx portal.