iCreate: Enhancing Usability & Transparency of Financial Information
Posted: 1 October 2013 | Source: Fintellix Solutions Pvt. Ltd.
A large number of Financial Institutions in India are waking up to a new era of financial reporting submission to Reserve Bank of India (RBI). As per RBI circular 199 and 1134, dated 14 August 2008 and 20 January 2009, all financial institutions would now have to submit the financial returns in an XBRL format for which taxonomies have been released by RBI.
The online XBRL submission of regulatory reports is actually an extension by RBI of its return automation system, Automated Data Flow (ADF). ADF allows financial institutions to submit returns through a Centralized Data Repository (CDR), which consists of validated and cleansed data that can be published in a straight-through processing mode (STP) without human intervention.
Since its inception in 1998, XBRL (eXtensible Business Reporting Language) has grown in features and acceptance and is widely considered as a reporting format across geographies and industries. A major growth factor can be attributed to regulators across the globe such as SEC in United States and HMRC in United Kingdom etc.
Currently in India, RBI is treading the push route of compliance adherence for financial Institutions to accept XBRL. While RBI will receive accurate information by standardisation of elements, financial institutions will see an ease of information monitoring, reduction in manual entry errors and also possible reduction in actual effort. Also rationalisation and standardisation will allow RBI to reduce the number of reports currently mandated by financial institutions to be submitted resulting in burden reduction on the financial Institutions.
XBRL - An Introduction
XBRL stands for eXtensible Business Reporting Language, the financial profession’s version of XML for financial reporting. XBRL was created by an industry-wide consortium seeking to develop a consistent method of reporting business event information.
The standard for the use of XBRL is freely available from the XBRL international consortium. At the heart of every XBRL implementation are one or more taxonomies providing the method to report business facts with their corresponding definitions. By defining the meaning of terms and identifying the standards in taxonomy, every member in information chain has a common understanding of the meaning of terms allowing for easier application and acceptance.
XBRL does not define taxonomies and owners of information supply chains such as financial institutions, regulators and other organisations are allowed to define them. Information providers are allowed to transfer to users a wide variety of types of data, including fragmented text, numeric facts, transaction flow, performance reports and data tables through XBRL.