What are XBRL taxonomies?

XBRL Taxonomies,are the dictionaries which the language uses. Each item of data are identified by a specific tag, taxonomies are the categorization schemes that define these tags.

Based on the accounting regulations these taxonomies might change. So different countries have their own taxonomies, within the US different national jurisdictions may have different taxonomies, different industries will have different taxonomies. There are also taxonomies for internal reporting purposes called the GL taxonomy.

How XBRL works?

Under XBRL every financial data has its identifying tag, which is computer readable. SO instead of having data as text, it is stored as a tag. Computer can read it, store it, analyze it, and present it in different forms. It will make not just intra company analysis easy, but facilitate inter company analysis. This is how: if the tag for Net Income is same for all companies, as is the case in XBRL, then the computer can generate a report analyzing the Net Income tag for one company against its competitors, other companies in different industries, suppliers, buyers, etc…It can compare data of not just national players but also international players.

The tags provide a range of information about the item, such as whether it is a monetary item, percentage or fraction. XBRL allows labels in any language to be applied to items, as well as accounting references or other subsidiary information.

XBRL can show how items are related to one another. It can thus represent how they are calculated. It can also identify whether they fall into particular groupings for organizational or presentational purposes. XBRL is easily extensible, so companies and other organizations can adapt it to meet a variety of special requirements.

Who is creating XBRL?

An international non-profit consortium of approximately 450 major companies, organizations, and government agencies is working on XBRL. It is an open standard, free of license fees.

What is XBRL?

eXtensible Business Reporting Language, is a language to communicate the financial data of an organization. It is a process of creating a standard platform/format for reporting. XBRL is a member of the family of languages based on XML, or Extensible Markup Language, which is a standard for the electronic exchange of data between businesses and on the internet.