Common myths related to XBRL and XBRL documents
There are certain misconceptions related to extensible Business Reporting Language. If you are in anyway related to XBRL conversion, it is important to alleviate them. Let us see most common among the misunderstandings.
It is a software piece
It is in fact not. Well! You need software for creating XBRL documents and to analyse them. The software program is termed as publishing software. A rendering tool is needed to read documents in this format.
It is a novel accounting concept
Extensible Business Reporting Language can be considered as a standard of information, not a new concept of accounting. It is another newer way of reporting the same information in more meaningful and richer way. XBRL accounting obviously works well with the accounting concepts already existing.
It is expensive
Implementing this is always a wise decision to make. In India, the costs are very less when compared to US. Listed companies have to incur heavy costs as the user licence for publishing software will definitely be more. So, the best option for such companies is to outsource such tasks to a professional company indulged in the same. They will be equipped with all kinds of software programs and tools including XBRL conversion software.
It is easy to learn
Learning extensible Business Reporting Language takes time and it's not that easy. Fresh recruits are normally given training of at least 3 months to provide them with the necessary domain knowledge and acquaint them with XBRL conversion tools for financial reporting. You can't make the workforce do miracles by training them for a week.
Somebody owns XBRL
No. It is an open source and completely royalty free. Nobody owns it. The said is one of the main reasons of its increasing preference and favouritism. The evolving of it owes to the collaboration between technologists and accountants.
It is going to increase the compliance burden
Actually, adapting it drastically minimises the compliance related burden on the filers. However, a fact to be understood is that initially the burden can be a bit higher as there can transition issues but in course of time, it will settle down and smooth sail.
It is to be feared
Even the minutest of errors will get highlighted with this. Also, chances for mistakes to happen will be minimum as pre-validation is done for the fillings.
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