Over a decade of its existence, XBRL (Extensible Business Reporting Language) has brought a major transformation to the global financial reporting landscape. Ranging from India, South Africa, and Singapore to the USA and Europe, XBRL has become the mainstay of filing financial statements.
To keep up with the technological changes, SSM, the regulatory authority of Malaysia, is in conversation to mandate XBRL for all companies in Malaysia. With this trend coming up, companies need to be apprised of XBRL and who needs to adopt it.
Let’s help you answer these key questions.
First, let’s address the elephant in the room –
What is XBRL?
XBRL is an XML-based electronic language that enables businesses to efficiently and accurately process and communicate their financial data. The most astonishing part of this reporting language is that it allows the presentation of financial information that is both human and machine-readable.
How? By tagging each element of the financial information with a label that accurately identifies it in terms of standard accounting principles and concepts. And all this information is submitted to the regulatory authority via MBRS, the new online digital reporting and submission portal rolled out nationwide.
Why? The aim is to eliminate manual processing, handling, and submission and transition to an automated online process.
A recent article in Accountants Today from the Malaysian Institute of Accountants reports, “By improving accessibility, information exchange, and quality of AR and FS, the MBRS adds value to the financial reporting landscape. The exchange of XBRL data via a centralized MBRS platform will develop big data and support the decision-making process at an organizational level.”
Source: https://www.at-mia.my/2021/08/23/xbrl-adoption-in-malaysia-a-way-forward-for-smps/
Who Needs to File in XBRL?
Once mandated, all companies incorporated in Malaysia will be required to file annual returns and financial statements in the XBRL format, except for certain exemptions. The XBRL reports will need to be prepared in accordance with the Malaysian Financial Reporting Standards Taxonomy (MFRS) and the Malaysian Private Entity Reporting Standards Taxonomy (MPERS).
Some companies may be required to file a full set of financial statements in the XBRL format, while others will only be required to file key financial indicators. Simply put, the financial and compliance requirements will depend on the type of company and the Exemption Application filed.
Who are the Exempt Ones for XBRL or MBRS?
The XBRL compliance requirement may change once the reporting language is mandated. However, as of today, the banking, financing, and insurance companies regulated by the Bank Negara Malaysia are exempt from filing a full set of annual returns and financial statements through MBRS.
Bottom Line
The early adopters are likely to face issues while transitioning to XBRL. This is why it is advisable to make this transition while XBRL is still in the voluntary phase. Figure out the problems and overcome the challenges with a reputed XBRL solution provider like DataTracks. Assisting companies from all over the globe for over 16 years, DataTracks has an army of financial professionals who are well-versed in every concept of XBRL. Leverage their expertise and make your transition to XBRL as smooth and error-free as possible.
To know more about their XBRL services and solutions, please speak to an XBRL expert @ +60-392-126-125 or email at enquiry@datatracks.my.