The ministry of corporate affairs has finally mandated that a set of companies will file balance sheets, profit and loss account, the director’s and auditor’s report for the year 2010-11 onwards by using eXtensible Business Reporting Language (XBRL) taxonomy. This language is used for the electronic communication of business and financial data and facilitates preparation, analysis and communication of business information.

Till date the prestigious e-governance project of the ministry of corporate affairs, MCA21 was accepting these reports from the companies in the form of scanned documents. Though the submission of scanned documents reduced the time taken for filing of corporate documents, it could not give any intelligent input to the government. These scanned reports could be viewed online but digging information from these scanned documents appeared tougher than the manual system.

The new system will facilitate analysis/sampling of the data submitted by the companies. As a step forward the government may even compare this data with that available with the other agencies like income tax department, stock exchanges, registrar of companies, financial institutions, banks etc. This will help the government prevent scams such as  Satyam as it will be able to check such gaps in advance.

The policy of submission of documents in XBRL format should be extended to all companies so that a large data is made available with the government which can converted it into useful information for checking financial crimes.

This information when made available to all stakeholders including government and the small investors in a ready to analyse format will make the MCA21 really meaningful and help achieve true e-governance.