XBRL stands for eXtensible Business Reporting Language. It is an electronic communication of business and financial data language developed to present financial statement on the Internet. The key advantage of this new “language” is that an identifying tag is applied for each individual item of data instead of treating them as a block of text.
Since the financial data is now tagged, it thus can be recognized by the recipient party’s computer. Accountants, auditors, regulators and financial analysts are used for other purposes; and also presents variety of ways in a fraction of a second and eliminate the possibilities of human error during the re-keying of financial data. This will allow flexibility while enhancing transparency and timely dissemination of relevant financial information.
With the financial data tagged before publishing onto the Internet, it is the Directors’ responsibility to ensure correctness and accuracy of the financial statement in XBRL format.
Although Malaysia has not implemented XBRL at this moment, there is a reasonable expectation that Suruhanjaya Syarikat Malaysia (SSM) will implement this in the near future. This expectation can be seen from the growing use of XBRL in the global environment, including our neighbouring country, Singapore. Other countries in Asia Pacific that are adopting XBRL formats are Japan, Korea, Australia and the Stock Exchanges of Thailand and China.
Singapore’s Accounting & Corporate Regulatory Authority (ACRA), which is the equivalent of Malaysia’s SSM, has already implemented XBRL formatting for Singapore companies incorporated on or after 1 November 2007.