Soon, You Can Read Cos’ Financials in Your Language

Posted: 03/10/2011 in Company, ICAI, XBRL

Soon, You Can Read a Company Balance Sheets in Your Language

The new financial reporting format will allow investors to view the balance sheet of companies in the language of their choice, helping spread financial literacy in the country.

Investors will be able to access a company’s balance sheet on the website of the ministry of corporate affairs (MCA) in any of the regional languages mentioned on currency notes, such as Bengali , or Kannada or Punjabi.

This will be possible once data on a standard balance sheet has been converted to the new format , known as eXtensible business reporting language (XBRL).

“Consuming of standardized data by different investors across the country is a huge step forward in the government’s plan for financial inclusion in the country,” an MCA official told ET.

XBRL, being developed by the MCA, uses an electronic glossary of business and financial terms known as taxonomy and helps in easier and more standardised financial reporting.

In the initial phase, the MCA mandate applies to all companies listed in India and their arms, including overseas arms, all companies having a paid-up capital of Rs. 5 crore and above, or a turnover of Rs. 100 crore and above.

Financial literacy is being spread through various measures across the ministry. The government’s Investor Education and Protection Fund (IEPF), too, has taken initiatives in this regard. “In collaboration with professional bodies, such as the Institute of Chartered Accountants of India, we have published investor handbooks and guidelines in almost 15 regional languages in order to educate and reach out to retail investors, especially in tier two and three cities,” an IEPF official said.

Stock exchanges, too, have realised the role of local languages in bringing about a financial services revolution, given that all listed companies will have to report in the new format.

The main exchanges , like the National Stock Exchange, now plan to introduce the same concept. “We understand that the finance ministry and the stock market regulator are already looking at providing financial information in regional languages through regional stock exchanges” the MCA official said.

The MCA initiative has the finance ministry’s approval. “This step is in sync with our overall financial literacy campaign. We have already asked financial institutions to provide details of financial products, such as insurance, in regional languages as well,” a finance ministry official said.

XBRL, an XML (extensible markup language)-based format , has provisions for foreign languages, too.

Source: The Institute of Chartered Accountants of India.

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