XBRL is a language that helps businesses communicate information more effectively. It can be used for a variety of purposes, not just financial reporting.
Using XBRL can help companies improve their internal management reporting processes and save time by eliminating the need for manual data input and review. It also ensures compliance with a variety of regulations that affect reporting.
In addition, XBRL can be easily adapted to meet a wide range of special requirements. For example, if a company has different accounting systems for its different divisions, XBRL can allow them to share their data with one another and produce reports in a unified format.
A taxonomy is a set of tags that can be applied to a business's XBRL-tagged data to create a consistent financial statement format. Typically, these taxonomies are defined by the company's internal reporting teams.
XBRL taxonomies are based on widely-accepted and proven definitions of business terms. This makes the data more comparable and easier to analyse.
The most recent version of XBRL, iXBRL, allows XBRL metadata to be embedded inline with an HTML document. This inline tagging allows for greater accuracy, as it prevents a user from accidentally appending an XBRL tag to the wrong location.
Automated Data Collection:
XBRL enables producers and consumers of financial data to switch resources away from costly manual processes, usually involving time-consuming comparison, assembly and re-entry of data. They can then concentrate on analysis, aided by software that can validate and manipulate XBRL information.