Back to Basics: What is iXBRL Format and Why Do You Need it?

iXBRL Format or inline eXtensible Business Reporting Language is a format that enables a single document to provide both machine and human-readable data. The CIPC introduced it to streamline financial reporting and enhance information communication between businesses and other financial information users such as investors, stakeholders, analysts, regulators, etc.

iXBRL Format embeds several “tags” that give meaning to the figures and statements furnished in financial statements in such a manner that a computer understands them. It does not change the financial information or how it is reported.

>> Learn about preparing AFS in iXBRL Format for CIPC filing in South Africa.
>> Learn how a Private Company (Pty) Ltd files AFS to CIPC in iXBRL Format.

iXBRL Format: Driving Financial Compliance in the Digital Era

Considering the impact of the iXBRL Format in improving efficiency when submitting Annual Financial Statements electronically, the CIPC mandated the digital reporting system for all eligible entities.

This digital reporting format helps companies file their AFS and transition from a PDF reporting format to a more structured and transparent format.

By introducing the iXBRL program, the CIPC aims to:-

• Reduce the regulatory and compliance burden on businesses to report financial information to the government.
• Achieve regulatory compliance and streamline the entire reporting process.
• Provide investors with more transparent and accurate business and financial information for better analysis and decision-making.

Do you know the Difference Between inline XBRL and XBRL?

Inline XBRL (iXBRL) is a significant improvement upon the traditional eXtensible Business Reporting Language (XBRL), aimed at enhancing the accessibility and comprehensibility of financial and business reporting. XBRL has completely transformed the landscape of financial data reporting and analysis. It has become the go-to standard for electronic communication of business information. However, one major obstacle remains: its lack of human readability. iXBRL combines the machine-readable data of XBRL with the human-readable HTML, bringing together the strengths of both.

Here’s a clearer, table-formatted comparison between XBRL and iXBRL to highlight their differences:

Global Adoption of Inline XBRL (iXBRL)

The move towards Inline XBRL (iXBRL) for financial reporting is gaining momentum across the globe, with several countries taking pioneering steps. Below are key examples of this international trend:

• United Kingdom: Her Majesty’s Revenue and Customs (HMRC) requires the submission of annual accounts and corporation tax returns in iXBRL format.
• South Africa: The Companies and Intellectual Property Commission (CIPC) implemented an iXBRL mandate in July 2018, signaling a significant shift towards digital financial reporting.
• United States: The Securities and Exchange Commission (SEC) has mandated a phase-wise transition for public listed companies from XBRL to iXBRL reporting starting in 2019, enhancing the accessibility and usability of financial data.
• European Union: The European Securities and Markets Authority (ESMA) has made it obligatory for all public companies to report their Annual Financial Statements (AFS) in iXBRL format, starting 1st January 2020, to foster greater transparency and comparability.
• Other Countries: Ireland, Malaysia, Japan, and Australia are also among the jurisdictions that have embraced iXBRL, further underscoring the global movement towards more integrated and efficient financial reporting mechanisms.

Why Do You Need iXBRL Format?

Whether you are an investor, a regulator, or a business, the iXBRL format can provide several benefits.

The iXBRL (Inline eXtensible Business Reporting Language) format is increasingly recognized for its significant advantages across the financial ecosystem, catering to investors, regulators, and businesses alike. 

Dual Readability and Enhanced Analysis: iXBRL facilitates both human and machine readability of financial documents. This dual functionality accelerates the review and reporting processes, making them more dependable and precise. Financial data managed in the iXBRL file format is more systematically organized, leading to enhanced analytical capabilities and superior information quality.

Transparency, Compliance, and Accuracy: The structured and high-authority nature of iXBRL data promotes greater transparency of business and financial information among users such as investors, stakeholders, and regulators. This feature enables a seamless comparison and deeper analysis of business reports, making it easier to assess and understand financial standings. Furthermore, iXBRL reporting significantly lowers the risk of errors by embedding tagged financial data directly within the documents. This precise tagging in iXBRL-compliant filings helps in the early detection of any inconsistencies, potential malpractices, or fraudulent activities, thereby aiding regulators in maintaining compliance and integrity within financial reporting.

iXBRL Format: The Only Way to Report Financial Statements.

Several financial and regulatory reporting regimes all over the globe have adopted the iXBRL reporting format due to the increased efficiency and high authority it offers.

By collaborating with DataTracks South Africa, a worldwide authority on iXBRL conversion services, you can optimise your financial reporting procedure, thereby substantially diminishing the financial investment and operational burden it places on your organisation. By partnering with DataTracks, you can be certain that you will be working with the preeminent iXBRL team in the industry. This team is not only distinguished by its more than two decades of unmatched experience but also by its extensive international presence spanning 26 countries, its substantial clientele of 28,000, and its proven track record of generating more than 400,000 reports. Their steadfast dedication to providing high-quality services guarantees the generation of precise financial reports, establishing them as a preferred option for enterprises on an international scale.

To learn more about the work DataTracks does and how it can help, please speak to an expert @ +27-10-446-9061.

Frequently Asked Questions on iXBRL instance

What is an iXBRL instance?

An iXBRL instance is a specific electronic document that uses iXBRL formatting. It combines a human-readable report (like a financial statement) with embedded tags that provide the corresponding machine-readable financial data. Think of it as a document with a hidden layer of data for computers to understand.

How Do I Create an iXBRL Instance Document?

Creating an iXBRL instance document involves a structured process to ensure that financial data is accurately and effectively encoded for submission in iXBRL format.

Mapping Financial Statement Elements: Begin by identifying each element within your company’s financial statements, such as assets, liabilities, revenue, and expenses. Then, map each of these elements to the corresponding element within a published taxonomy that best represents the financial data. Taxonomies are standardized classification systems used in iXBRL reporting to ensure consistency and comparability of financial information across different organizations.

Creating Instance Documents for Financial Statements: Once mapping is complete, use iXBRL software to create instance documents for your financial statements. An instance document for the Balance Sheet and another for the Profit & Loss Account are generated by inputting the mapped data into the software, which then encodes the information in iXBRL format. These documents contain the actual financial data in a structured, machine-readable format, tagged according to the mappings you’ve established.

Reviewing and Verifying the Instance Document: After creating the instance documents, it’s crucial to conduct a thorough review and verification process. This ensures the accuracy and completeness of the financial data and its compliance with the relevant taxonomy. Review the tagged data for any errors or omissions, and verify that all financial elements are correctly mapped and represented. This step may require collaboration with financial reporting experts or auditors who are familiar with iXBRL and the specific reporting requirements of your regulatory environment.

At DataTracks South Africa, we specialize in iXBRL solutions and boast a team of dedicated iXBRL experts. Our expertise ensures not only the meticulous creation and mapping of your financial statements but also a comprehensive review and verification process, guaranteeing the precision and regulatory compliance of your instance documents. Contact our iXBRL experts today!