Message from the Minster of Corporate Affairs, Shri Murli Deora on XBRL
Consider the enormity of the data-over 8 and a half lac companies, over hundred online services offered to them, over sixty e-forms.hundreds of data fields and crores of pages of pdf attachments.
If this speaks about something, it is the challenge before the Regulator, the Ministry of Corporate Affairs (MCA), which is humongous. While MCA is responsible for providing convenient and transparent registry and e-filing services to one set of stakeholders, which is the corporate and the professionals, it is also expected to protect the interest of millions of investors from every single instance of attempted fraud or financial irregularity by firms.
Internationally, usage of Extensible Business Reporting Language (XBRL) has been demonstrated as an effective solution that can create a lot of improvement in reporting, processing and analysis of data. The other benefit of XBRL, is the flexibility of the medium to support various reporting applications. XBRL caters closely to requirements of various industries. Individual organizations can adjust it to meet their specific business reporting requirements.
In a very short duration, XBRL has been adapted globally to improve transparency in collecting and disseminating business information. Ministry of Corporate Affairs, a leader in e-Governance in the country with its flagship initiative MCA 21, in its endeavor to make its services more efficient and meaningful to all its stakeholders has identified XBRL as a highly useful tool. We in the Ministry of Corporate Affairs believe, that this change initiated by the Ministry would benefit the business community tremendously with individual organizations too gaining a new perspective into their account keeping.
Hoping to create a healthy business environment, a clear and transparent system and a confident Indian investor-all through this initiative of implementing XBRL compliant reporting in MCA.
Message from the Secretary, Ministry of Corporate Affairs, Shri DK Mittal
Technological advancements in recent decades have given us a digital platform for financial information. However, ˜digital™ does not mean ˜compatible™ because each software application generates the financial documents in different formats (pdf, xls, html, doc. etc), which unfortunately cannot be read directly by another software application. Such challenges have resulted in inconsistencies in the financial data as well as inordinate delay in discharging the regulatory roles of the Ministry.
With the development of XBRL as a standard to exchange financial data, such constraints have largely been mitigated. XBRL is a language for the electronic communication of business and financial data that has revolutionised business reporting around the world. Its major benefits include ease in preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. It is an open standard, free of licence fees, being developed by a non-profit making international consortium of major companies, organisations and government agencies, and is widely accepted by the international accounting community.
Ministry of Corporate Affairs has mandated the filing of financial statements of select class of companies in XBRL from FY 2010-11. It is proposed to expand its coverage from next year. The experience gathered from this years™ filing would be incorporated to further streamline the XBRL filings in coming years. Extensive orientation and training programmes have been planned by the Ministry for awareness and handholding of all stakeholders in different parts of the country. I urge all to work with the Ministry in this endeavour towards improving the quality of financial reporting in India.