XBRL Applicability in India

XBRL Full Form

The full form of XBRL is "eXtensible Business Reporting Language".

Introduction to XBRL

XBRL is a language for e-communication of financial & business data for business reporting. It is revolutionising step taken by many countries around the world. It offers major benefits to all those who have to create, transmit, use or analyse such information. 

XBRL has been developed by XBRL International, Inc. (XII), a not-for-profit consortium of over 600 companies and agencies which is promoting its worldwide use.

The Institute of Chartered Accountants of India (ICAI), the standards setting body has developed taxonomy for Commercial and Industrial companies as per the provisions of Revised Schedule VI to the Companies Act, 1956. It has been developed as per the IFRS architecture 2011.

XBRL India is developing taxonomies for specific industries in consultation with the respective regulators viz. Insurance, Power and NBFCs.

XBRL Applicability -Which class of companies has to file the Financial Statements in XBRL?

Vide General Circular No: 16/2012 dated 6th July 2012, Ministry of Corporate Affairs has decided that companies falling in the following categories will have to file their Balance Sheet and Profit & Loss Account under section 220 of the Companies Act, 1956 using the Extensible Business Reporting Language (XBRL)
taxonomy for financial year commencing on or after 01.04.2011:-

(1) all companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or

(2) all companies having paid up capital of Rupees five crore and above; or

(3) all companies having turnover of Rupees one hundred crore and above; or

(4) all companies who were required to file their financial statements for FY 2010-11, using XBRL.

However, banking companies, Power companies, Non Banking Financial Companies (NBFC) and Insurance companies are exempted from XBRL filing till further order. 

All XBRL filing companies are allowed to file their financial statements in AOC 4 XBRL without any additional fee upto 30th November 2015. This relaxation has been given in light of the new forms coming into effect for the first time this year.

XBRL Taxonomies

Taxonomies are dictionaries used by XBRL. They define the specific tags for individual items of data (such as "net profit"). Different taxonomies will be required for different financial reporting purposes. Different XBRL jurisdictions may have their own financial reporting taxonomies to reflect their local accounting regulations. Many different organisations, including regulators, specific industries or even companies, may require taxonomies to cover their own business reporting needs.

XBRL - Potential Applications

The use of XBRL is quite varied and wide; it can be used in many places especially in reporting financial and business date of organisations. Some of these applications of XBRL are mentioned herein:

  • Reporting of business data to statutory authorities like central govt., state govt., banks, tax authorities.
  • Information exchange between government authorities or departments of one country with other or internally in the country.
  • Reporting of financial data – both internal and external.
  • Filing of loan applications and reports; credit risk assessments.
  • Authoritative accounting literature – providing a standard way of describing accounting documents provided by authoritative bodies.

XBRL - Advantages

XBRL offers many benefits in the field of business reporting and analysis.
  • Improved way of reporting;
  • Very analytical;
  • Automated;
  • Reliable & accurate;
  • Cost effective;
  • Less time consuming;
  • Low risk in data handling;
  • Helps in better decision making.

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