Financial reporting in for sea change, forecasts PwC

Financial reporting in the coming years will undergo a sea-change with the evolution of XBRL (extensible business reporting language), according to a PricewaterhouseCoopers (PwC) forecast.

The language, being developed by a consortium since early 1999, has several sponsors including Microsoft, Morgan Stanley, PwC and SAP. It is based on XML (eXtensible Markup Language) and will play a crucial role in facilitating preparation, dissemination and interpretation of financial reports, according to Rajarshi Sengupta of PwC.

XBRL is an electronic format for simplifying the flow of financial statements, performance reports, accounting records and other financial information between software programmes.

It reduces the importance of the way data is presented in financial statements by allowing each user of the data to analyze it according to his own priorities, Sengupta explained while releasing PwC's Technology Forecast 2003-05 report here today.

The report details how standards such as XBRL and improvements in business intelligence and integration technologies can provide companies with a realtime view of operations, and also allow decision-making more quickly and effectively.

The effect that XBRL will have on the business community will be more significant than the transition from paper and pencil analysis of information to the use of electronic spreadsheets, Ambarish Dasgupta, the ED of PwC, said in a statement.

The PwC Technology Forecast is published annually since 1993 and this year's theme is - 'The Intelligent Real-Time Enterprise.' The report highlights a series of technologies that enable companies to manage information more effectively and react more quickly to changing business conditions. PwC organised a seminar on the report today.