Implementation Challenges Although XBRL has several benefits, there are significant challenges in its global implementation, some of which are listed below: • Definition of taxonomy: The definition of a globally identifiable taxonomy is made difficult by the differences in financial reporting worldwide. To enhance the scope of XBRL, taxonomy must be defined for each specific area, which is cumbersome and time consuming. • Creating user awareness: Educating users on how to identify the taxonomy to map a particular piece of information – for example, identifying a unique code to represent each financial item, such as sales – is a challenge. Any mismatch in reporting would distort the financial statements. • There is a need to develop software which converts existing standard reporting templates. This converts each financial item into XBRL codes, to enhance the scope of XBRL’s application. XBRL- Reporting for the Future XBRL is a great tool for bringing an interactive approach to financial and corporate reporting. It fosters accountability among issuers, empowers regulators, and by providing accurate information, enables key stakeholders to take better decisions. Its scope of application may be extended to other areas in the financial markets domain as listed below: • The entire process of submitting MIS returns to central banks can be made XBRL compliant so that reported data is consistent and accurate. This will enable the central banks to make correct assessments. • If Basel II reports are made XBRL compliant, they can be efficiently supervised by central banks under the purview of Pillar II. Some of the central banks in Europe have already made significant progress in this regard. • Some of the day-to-day banking functions of a centralized operations environment (one processing centre and many branches) can be handled through XBRL. For example, instead of scanning the entire account opening form, a bank branch can enter minimum mandatory information such as the client’s name and address using unique XBRL identifiers, so that the processing centre can access these details online and open the account. This would not only save time and effort but also computer memory needed to store scanned documents.