Q: why reporting is done in XBRL format worldwide
XBRL is used for reporting worldwide because it offers a number of advantages over traditional reporting methods, including:
- Accuracy: XBRL data is machine-readable, which means that it can be easily checked for accuracy and completeness. This is important for regulators, investors, and other users of financial information.
- Consistency: XBRL reports are consistent in format and structure, regardless of the reporting organization. This makes it easier for users to compare data from different companies and industries.
- Efficiency: XBRL reports can be processed and analyzed much more quickly and efficiently than traditional reports. This is because XBRL data can be automatically extracted and aggregated by software applications.
- Interoperability: XBRL reports can be easily exchanged between different software systems. This makes it possible for users to access and analyze XBRL data from anywhere in the world.
As a result of these advantages, XBRL has been adopted by regulators and companies in over 100 countries around the world.
Here are some specific examples of how XBRL is being used for reporting worldwide:
- The US Securities and Exchange Commission (SEC) requires all public companies in the US to file their financial statements in XBRL format. This helps the SEC to more easily and efficiently monitor the financial health of public companies.
- The European Union (EU) has mandated the use of XBRL for reporting by certain types of companies, such as banks and insurance companies. This helps the EU to promote financial transparency and reduce the risk of financial crises.
- The International Accounting Standards Board (IASB) has developed a global taxonomy for XBRL reporting. This taxonomy is used by many countries around the world to standardize the reporting of financial information.
In addition to financial reporting, XBRL is also being used for reporting in other areas, such as environmental reporting, sustainability reporting, and risk reporting.
Overall, XBRL is a powerful tool that can be used to improve the accuracy, consistency, efficiency, and interoperability of reporting worldwide.
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