XBRL is revolutionising digital financial reporting
There has been a recent surge of businesses utilising eXtensible Business Reporting Language (XBRL) for their financial reporting. Globally, millions of organisations in over 50 countries are successfully running with XBRL.
The growth of XBRL in South Africa continued to rise when, on 1 July 2018, the Companies and Intellectual Properties Commission (CIPC) enforced its right to prescribe the use of XBRL for financial reporting (in line with the requirements of the Companies Act). The CIPC considers XBRL the international best-practice standard for Digital Business Reporting. It confirms that XBRL is a freely available standards-based way to communicate business information, and that the local jurisdiction lies with XBRL South Africa.
“XBRL is a freely available electronic language for financial reporting that is based on Extensible Markup Language (XML) and is produced and consumed by XBRL-enabled software,” explains Mandy Leonard, Business Development Director, Oracle Services at iOCO.
Leonard explains that XBRL offers ease of use. The user inputs some core data into the pre-tagged templates and the XBRL Service takes it from there, providing the XBRL conversion, effectively reducing the chance of errors by limiting manual interaction. With back-end automation, the capabilities of existing software solutions already in place are enhanced. When tagging AFS data or submitting XBRL files to the CIPC, iOCO utilises custom-developed software packages for manual tagging and complete outsourcing of annual financial statement compilation.
XBRL is managed by a global non-profit consortium known as XBRL International. The mass appeal and global draw to this manner of financial reporting is explained by the CIPC, which states: “Because it is a standardised language, XBRL enables efficient apples-to-apples comparison of financial data across multiple companies and industries.
To this end, XBRL applies identifying mappings to items of data, enabling them to be processed and analysed in an interactive way. XBRL mappings provide financial communities with a digital standards-based method to prepare, publish, reliably extract and automatically exchange financial statements of publicly held companies. XBRL does not establish new accounting standards. Instead, it enhances the usability of existing standards.”
This enhancement of existing standards can be seen in the various benefits XBRL offers. Some of these include benefits in the preparation, analysis and communication of business information, as well as greater efficiency and improved accuracy and reliability.
“The CIPC has outlined specific areas in which software providers are called to assist businesses in their XBRL reporting. As a software provider, iOCO has meticulously integrated these services into its XBRL offering, including various XBRL extensions to ensure databases remain compliant, and reporting is in line with legal mandates,” concludes Leonard. “The focus remains XBRL as a service, ensuring back-end automation, assisting the tagging of AFS data, and submitting XBRL files to the CIPC. Especially in these uncertain times, businesses must embrace digital financial reporting – it has been revolutionised for a more secure and efficient future.”