The Benefits of XBRL
XBRL, also known as eXtensible Business Reporting Language, is an open standard reporting language that was introduced with the intention of improving the quality of financial data reporting.
It is a form of extensible markup language (XML) that is used across the globe today, and millions of XBRL documents are created each year.
As a result of its versatile applications, there are a wide number of regulators who have adopted XBRL over the past decade, including countries such as the UK and the US. The uses of XBRL span various reporting and data exchange purposes, and its popularity shows no signs of stopping over the coming years.
Below are just some of the reasons highlighting the importance of XBRL as a reporting language, showcasing its pivotal role in transforming financial reporting and analysis..
Why use XBRL?
XBRL has the power to change the reporting landscape for the better, bringing about significant benefits of XBRL improved accuracy, transparency, and efficiency in financial reporting processes. For instance
- It offers benefits to a range of users. In fact, anyone that wishes to analyze or compare data can benefit from XBRL, as it makes information more readily accessible to anyone – from stakeholders in a business to investment analysts and government agencies.
- It reduces the need for manual data entry. Many businesses still rely on a large number of manual processes to prepare and review their financial statements, which is not only time-consuming but also carries the risk of a data entry error. XBRL reduces a business’ reliance on such manual input and review processes, meaning more time can be spent on data analysis.
- XBRL isn’t just for financial data. It’s a common misconception, but XBRL isn’t just useful for financial reporting. In fact, XBRL can also be used to communicate non-financial data, such as a business’ inventory status. This means that, if a business leverages the power of XBRL, it could potentially improve its own internal management reporting processes.
- Regulators recognize its importance. The SEC is no stranger to XBRL and has required large public companies to use XBRL to file their financial statements since 2009. Since then, this requirement for XBRL filing has been extended, more recently to Foreign Private Issuers who prepare their financial statements under IFRS.
- XBRL compliance costs are falling. A recent report released by XBRL US and the AICPA highlighted that the average cost of XBRL preparation had almost halved in the period between 2014 and 2017, with most businesses seeing annual costs of $5,500 or less.
Know the top 3 reasons before you finalize iXBRL service provider
DataTracks is in business since 2005, providing cloud-based software solutions to help prepare compliance reports for filing with regulators worldwide such as SEC in the United States, ESMA, EBA, and EIOPA in the European Union, HMRC in the United Kingdom, ACRA in Singapore, SSM in Malaysia, CIPC in South Africa and MCA in India. DataTracks’ iXBRL tagging services ensure that your financial statements are accurately tagged and compliant with the latest regulatory requirements.
