XBRL: Beyond financial reporting – Part II
In our May blog, XBRL “ Beyond Financial Reporting (Part I), we discussed how use of XBRL can benefit different areas such as Medical, Sustainability Reporting, Corporate Actions and industries such as Energy, Transportation and Construction. Now we review some more areas that can benefit with XBRL usage
XBRL used for disclosure of federal spending:
US citizens and taxpayers should be able to track and understand how the government is spending the tax dollars collected from public. In order to bring in transparency and accountability, the Digital Accountability and Transparency Act of 2014 (DATA Act) was formed. The DATA Act is the first US open data law. Its goal is to transform all federal spending information from disparate documents into standardized, machine-readable data i.e. XBRL. Data Act will not change the content of the existing reports nor does it change who sends or receives the existing reports. It just imposes a common data format and common fields by using XBRL as open data format.
The DATA Act will create better accountability and transparency for U.S. taxpayers and citizens and will reduce the compliance costs by automating the creation of reports.
XBRL used for disclosure in extractive industries:
The Canadian government has proposed new legislation in order to implement new mandatory reporting standards, the Extractive Sector Transparency Measures Act, for extractive (oil and mining) companies. The extractive companies will have to report the disclosures of payments to foreign and domestic governments at all levels. This applies to an entity engaged in, or controlling other entities engaged in the commercial development of oil, gas or minerals in Canada or elsewhere, including exploration and extraction and the acquisition or holding of permits, licenses, leases or other authorizations for such purpose and that either:
- is listed on a stock exchange in Canada; or
- has a place of business, does business or has assets in Canada and, for at least one of its two most recent financial years, meets at least two of the three thresholds below:
- the company has at least $20 million in assets (all currency Canadian);
- the company has at least $40 million in revenue; and/or
- the company employs an average of at least 250 employees.
It is likely that a common reporting template will be ultimately developed for use in Canada and later in the European Union and the United States. XBRL is proposed to be chosen as the reporting language format.
XBRL used for disclosure of not-for-profit organisations:
A new legislation, the Transparency in Government Act of 2015 (TGA) has been introduced. It contains provisions that will continue the push for the federal government to become more transparent and manage itself more effectively through the use of technology. A section of the new proposed legislation requires IRS to expand e-filing to cover all non-profit organisations. It also requires both collecting and publishing NPOs 990 Forms in a non-proprietary machine-readable format. XBRL is the proposed format in which these forms will be collected and published.
XBRL used for disclosure in banking industry:
The banking sector in US has been filing in XBRL since October 2005, which is much farther back than their mandate for public companies. Banks have to file XBRL with Federal Deposit Insurance Corporation (FDIC). Since 2014 the banks in European Union have also been mandated to file XBRL reports with European Banking Authority. Â XBRL has been effectively deployed to standardise formats for risk reports in the banking sector.
The adoption of XBRL in more and more areas apart from financial reporting has proved beneficial. The implementation of XBRL in the US and rest of the world has led to discussions on how other industries can benefit by implementing the XML based language.
About DataTracks: DataTracks is a global leader in preparation of financial statements in XBRL and iXBRL formats for filing with regulators. With a track record of over 10 years, DataTracks prepares more than 12,000 XBRL statements annually for filing with regulators such as SEC in the United States, HMRC in the United Kingdom, Revenue in Ireland, MCA in India and ACRA in Singapore. DataTracks provides world-class services with its team of certified accountants experienced in US GAAP, UK GAAP, India GAAP and IFRS.
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