Globalization is a reality in today’s world. Its impact on global economy is enormous. As globalization intensifies the need for complex financial information becomes obvious. Expanding capital markets require analysis of financial statement prepared under diverging accounting standards. Investors believe that the lack of common financial statement increases the risk of an investment and affects the free flow of world capital. A single set of accounting standards would bring great benefits to the investors and would reduce the cost of accessing capital markets around the world. The convergence of accounting standards would assure enhanced comparability, greater reporting transparency, more efficient capital markets and improved accountability in business and non business sectors. In this context a new common language for business and financial reporting is a must.

XBRL is the language that promises to revolutionize business reporting around the world. XBRL tags enables automate processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison, increasing the speed of handling of financial data. As it belongs to the family of XML languages, XBRL facilitates automatic exchange of financial information across various software platforms.

In this paper we examine the role that XBRL can play in enhancing financial reporting, its global acceptance and how can it support the ambitious objective of accounting convergence.