The XBRL technology standard for business information reporting was initiated in 1998 by Charles Hoffman when a handful of forward-looking accounting and technology experts came up with the idea of structured data for business information. Later that year, the American Institute of Certified Public Accountants (AICPA) was approached to spearhead the introduction of what was to become XBRL to the world. AICPA provided funding to begin research and development. In 1999, the prototype is completed and named XFMRL (Extensible Financial Reporting Markup Language). The prototype is describing XML as important for the accounting profession. The first XFRML consortium meeting took place in New York by October 1999. Soon thereafter, the initial name XFRML was changed to XBRL once the name was determined by the consortium members. The XBRL committee announces the presentation of the first specification for financial statements for American businesses. The membership of the committee increases significantly. (Gray 2007) In April 2008, XBRL US completed the first release of the XBRL US GAAP Taxonomy and subsequently published the 2009 Release, 10 years from when the idea was born. Today, XBRL is being adopted around the globe by the business community which sees the opportunity to transform the way it communicates and conducts business. (XBRL.us)

XBRL(eXtensible Business Reporting Language) is a financial reporting markup language derived from XML (eXtensible Markup Language). The markup language is used to tag or label information within the financial statement. In other words, XBRL is XML-based language which allows business information to be electronically communicated. It uses standard identifiable tags to describe and identify each item of date in an electronic document which allows the exchange of business reporting data by encoding the information across multiple documents. This allows businesses to create concise reports that separate different data, such as net profit from payroll numbers, making those numbers available as an open source code. According to AICPA(1997), the primary aim of XBRL is to enhance the efficiency and effectiveness of exchanging and analyze business data by improving reliability and flexibility to update. It helps to enhance critical business processes from data integration to reporting, auditing and standardizing data throughout the organization. Financial reports filed in XBRL format were mandated since 2009 by the SEC (Securities and Exchange Commission) and required public companies to comply. XBRL software is generally user-friendly, requiring no previous knowledge of XML and no IT background. It will be used to digitally publish financial statements of companies that are issued to external user. XBRL can integrate the source data easily by promoting the convenience of financial reporting through information technology.

According to FASB (2006), beyond regulatory compliance, the use of XBRL could prove to have a significant impact on the future of the accounting and financial reporting, auditing and business decision making of corporations. It will ultimately provide greater transparency of accounting and financial data to investors, analysts, government and other external stakeholders. The tagging of every piece of data information relevant to financial reporting will result in a stable and consistent system which helps the collection of data and the preparation of financial reports more efficient and effective. This result in the standardization of information content therefore need for an extensive and expensive conversion project to keep multiple sets of files will not be necessary. Firms will be able to easily access the data to compile reports under different sets of standards. Moreover, XBRL facilitates the continuous audit and reduces audit costs as the audit process has evolved from the manual audit to a computer-based audit. In addition, enhanced information sharing between companies and financial-market participants is crucial. Investors and financial analysts are looking for more efficient access to company financial data so that faster, more accurate and robust analysis is possible for more prudent, informed decisions and smarter investment. By offering reports to the markets via XBRL web services, companies can make currently reported information readily accessible and re-usable to these stakeholders. XBRL also enables a dramatic improvement in the processing and accessibility of financial reports with XBRL-based financial statement. It is a digitally enhanced version of paper-based financial statements. Investors can quickly and easily discover and select the facts about a business and immediately begin analysis as every piece of information in a report. Besides, the market stakeholders will likely have more confidence in the accuracy and integrity of the information company produce via an XBRL web services automated environment, rather than through manual processes. In this aspect, management gains greater influence over valuations as information and messages are tagged for immediate investor access and re-use.
XBRL may represent an opportunity for enhanced business reporting, providing management with better internal information, improving how the company communicates with investors and the capital markets, and even reducing reporting costs. In assessing the impact of adopting XBRL, companies should consider potential benefits and advantages.
XBRL is a standard that has been accepted and adopted the world over thus reducing inconsistencies in terminologies and data formatting. It streamlines the creation and validation of financial and other business reports by attaching standardized “tags” to data within documents and other data sources allowing automated analysis and reporting of the data. XBRL facilitates the analysis of financial data by using pre-existing names to standardize business reporting terminology. Companies often use different terms to describe the same concepts. XBRL normalizes company-specific terminology to get to the root business reporting concepts, allowing comparison of essentially similar information across multiple financial statements and among multiple companies. Therefore, this can reduce today’s typical laborious and error-prone manual reporting and analysis processes.
By implementing XBRL, it provides highly accurate data which allows much faster and real time preparation of reports. For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply, and efficiently if the sources of information have been upgraded to using XBRL. Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy. Consumers of XBRL-formatted data can automate its handling, validation, and analysis, reducing time-consuming and costly collation and reentry of information. The human effort normally spent on manual compilation of data can switch to higher, more value-added analysis, review, and decision-making.
Besides, XBRL is independent in platform and region area. It is an open standard and allows the data to be exchanged and transferred. It also allows the presentation and exchange of data in many different languages. XBRL allows for increased transparency of financial information to stakeholders, at a granular level. For example, companies reporting under a common taxonomy provide specific details that are immediately comparable by investors and analysts in investment decision-making. This can benefit the organization in various ways, such as improved investor relations, investor coverage, and access to capital markets.(Ernst & Young) In this way, investment analysts can save effort, greatly simplify the selection and comparison of data, and deepen their company analysis. Lenders can save costs and speed up their dealings with borrowers. Regulators and government departments can assemble, validate and review data much more efficiently and usefully than they have hitherto been able to do.
However, it is not a substitute for the financial accounting systems, controls, procedures, and related managerial oversight required to prepare GAAP-compliant financial statements and it also brings some limitations.
Firstly, XBRL language is still very young, its definition system is not complete yet, the taxonomies still need to be modified. The first final rule of XBRL has just been announced in 2005. Many small errors might exist in this new concept and definitions according to feasibility may still require to be further modified. It does not check the accuracy of financial statements for compliance with accounting standards, including company decisions with respect to when, how, and at what value transactions are reported and disclosed within those financial statements. XBRL data is computer-readable and users will not visually recognize the errors, especially when using XBRL analysis software. Multiple errors in signage, amounts, labeling, and classification has been revealed from a study of the North Carolina State University Department of Accounting College of Management evaluated the accuracy of XBRL filings for 22 companies participating in the SEC's voluntary filing program in 2006.
Secondly, XBRL is too new that very few people know about it. If we took a random example of 20 people on the street and ask them whether or not they know about XBRL, there is 95% change that 20 people will say “no”. The reason is that eXtensible Business Reporting Language has just existed for very few years. Even people who are working in financial sectors, very few of them had been introduced to this concept and not all accountants have familiarity with XBRL. In fact, some have only heard of the language. Only related accountants are guided to know XBRL taxonomies and then try these very few XBRL software and online database system. XBRL's complexity combined with letting inexperienced users create data for transmission increases the opportunity for errors. These errors lead to a lack of confidence in the system and by investors. Because of this reason, many companies outsource the implementation of XBRL instead of letting in-house management information systems resources (MIS) manage the implementation. This outsourcing leads to increased cost and defeats the cost-cutting benefits associated with implementing XBRL.
Thirdly, the using of XBRL involves financial transparency, XBRL takes away a company's ability to "hide" financial tricks in the books. Despite the fact that XBRL's design makes filing financial information easier, cheaper and faster, investors could find themselves digging deeper to determine the exact data reported. Due to XBRL data remains available at all times, and therefore it requires more security to maintain its integrity. These stricter security requirements not only affect security breaches initiated outside of the company's database, but security breaches from within the company as well. More accurate data makes XBRL a great tool, but it also means the data must remain secure. If a data breach occurs and investors gain access to the breached data then inaccurate investment decisions could stem from the breach. Yet, because this technology is based on internet, intelligent computer user, so called hackers, may still get access to confidential data and disclose it to harmful bodies. Another un-welcomed gust is computer virus, which can cause financial database system failure.
Lastly, the largest limitation of XBRL remains to the comparable expensive setting up cost. When adopting XBRL, organizations or financial reporting bodies need to reconstruct existing financial data system and re-input a big amount data again in XBRL format. On the other side, costs also take place when educating staffs to use this format and buying XBRL based commercial software. According to Malin, Bergquist and Company, LLP, "Although some experts say, over time, XBRL could lead to up to a twenty five percent decrease in reporting costs, some companies may find it difficult to justify the initial costs. “Unless a company has an automated tagging process, tagging XBRL data consumes hours of labor, increasing the cost associated with using the language.
XBRL language is intended to support all current aspects of reporting in different countries and industries. Its extensible nature means that it can be adjusted to meet particular business requirements, even at the individual organisation level. Nowadays, XBRL is a mandate for many regulatory filing in India, US, UK and many more. XBRL enables reporting in any taxonomy like Indian GAAP, IFRS, US GAAP & UK GAAP, thus satisfying the regulatory reporting requirement of companies falling under any jurisdiction. There are enormous quantities of information are moving among federal, state and local governments, between those governments and citizens and corporations. At each one of these intersections lies an opportunity to establish data standards that would enable more reliable and timely data flows. Computer applications will automatically find comprehensive, granular data the instant it is posted online and flow it into analytical models for deep, automated analysis. The XBRL data recognize the information in an XBRL document which is selecting, analyzing, storing, and exchanging it with other computers and present it in a variety of ways for users. As companies review their business reporting disclosure controls and procedures and begin to comply with new filing requirements, XBRL puts reported information into an instantly reusable computer- readable format. It helps to facilitate and restore confidence in business reporting as well as to communicate accurately the value of the company.
In Asia, XBRL is being used by the capital markets. Stock exchanges in China, Japan, Singapore and South Korea all mandate XBRL data. Besides, Japanese companies such as Wacoal and Fujitsu have begun to benefit from the use of XBRL for internal applications. In 2004, China became the first country to formally adopt XBRL reporting for its equity markets. Chinese innovation continues to lead XBRL into new areas such as risk profiling, data mining and communicating text information along with financial data.
Besides the United States, countries where XBRL projects are being actively implemented include Australia, Belgium, China, Germany, Italy, Japan, Korea, Singapore, South Africa, Sweden, and the United Kingdom. The Bank of Spain, for instance, developed an XBRL-based Financial Information Exchange System, while in The Netherlands, the Dutch Ministry of Finance is using XBRL to present the country's national budget to large audiences in an interactive and transparent way. It is proved that XBRL is a universal information format which offers tremendous opportunities for the financial services industry. XBRL provides banks with a structure and procedure, allowing consistent analysis and reporting. It also helps ensure better data quality and data integrity, leading to clearer and more accurate business reporting. XBRL is often used by banks to disparate information systems to communicate seamlessly with each other over the internet. It radically reduces the time and costs associated with key business processes such as credit risk assessment and monitoring and streamline their own business reporting processes.