by Shilpa Dhobale | July 8, 2016
9 years ago the U.S. Securities and Exchange Commission (SEC) introduced voluntary filing in XBRL. The concept was new back then and filers might have been apprehensive in changing their compliance reporting processes. But times have changed and today, all publicly listed companies and mutual funds in the U.S file their documents to the SEC in XBRL.
The U.S. SEC is once again at a cusp, this time with inline XBRL or iXBRL. The SEC recently announced voluntary filing for inline XBRL effective through March 2020.
What does this mean for corporates? Is this the opportune time for you to tighten up your processes and plan for the unavoidable shift? Or should you take your chances and wait for an official announcement?
For those who are still contemplating the move due do its perceived novelty, we have some news.
Inline XBRL is not a new concept at all. In fact, the first version of the Inline XBRL Specification was released in 2010 and UK was the first country to mandate inline XBRL filings. With its added advantage over XBRL, that of making data readable to both humans and machines simultaneously, inline XBRL has already made inroads with several regulators around the world.
Here is a list of regulators that have already adopted the standard and are gaining significant benefits from it.
In April 2011, companies in the UK started filing their annual accounts and corporation tax returns in inline XBRL to Her Majesty's Revenue and Customs (HMRC), the UK tax authority and Companies House, UK¬ís Companies¬í registry. It is today one of the largest implementations of inline XBRL with around 1.9 million companies filing their accounts and tax returns every year.
This white paper on inline XBRL company filings in UK highlights the features of the XBRL and inline XBRL programs in the UK.
Inline XBRL helps UK¬ís HMRC and Companies House to provide XBRL data in a coherent and consistent manner. This, in turn, enables analysis and comparison of company information that is practical, efficient and useful. It also promotes ease-of-use of XBRL, keeping down cost and effort for reporting companies and other users. This move did not impose unreasonable or unnecessary burdens on either producers or consumers of information and has provided value for money for filers and regulators equally.
Japan¬ís Financial Services Agency (JFSA) regulates banks, insurance companies, listed companies and investment funds. JFSA, one of the early adopters of structured data, mandated XBRL in 2008 and this was later replaced with the iXBRL file format in 2013. The mandate covers close to 3,500 listed companies and 5,500 investment funds.
Along with iXBRL, another change that happened was increase in the scope of structured data filings to include material facts along with financial information. A major benefit of adopting inline XBRL was also that it made it possible to expand the scope of detailed tagging in the future.
Revenue Commissioners (known as Revenue), is the agency that regulates customs, excise and taxation in Ireland. In 2012, the Revenue initiated a voluntary program for all tax payers to file their financial statements in inline XBRL. The mandatory filing was introduced in phases starting with large companies in October 2013 and moving to the remaining corporation tax payers in October 2014.
There are some categories of companies that are exempt from inline XBRL filing for the time being but they are encouraged to avail of the optional filing facility.
One of the initial consultative papers by the Revenue, Ireland highlights that inline XBRL allows viewing of non-tagged information as well. Thus, for regulators who wish to increase the scope of mandate gradually or for those who plan to collect specific data that is relevant for analysis, inline XBRL is a good choice. This particular benefit has been aptly explored by the Revenue, Ireland as they plan to go for phase-wise iXBRL implementation.
The Danish Business Authority (DBA) is the business registry of Denmark. Around 215,000 companies submit their digital reports to DBA annually.
The XBRL mandate was introduced in a phased manner and in 2015 the XBRL data and its PDF counterparts were made freely available. While the requirement is to file PDF and XBRL documents, their filing system also accepts inline XBRL. The smaller companies are given an option to create their annual report using DBA¬ís application that uses inline XBRL as the rendering format.
Standard Business Reporting (SBR) is a pan-Government initiative with the objective of streamlining business reporting and reducing the reporting burden of businesses. Australia is one such country where SBR is already in action.
The Australian Securities and Investments Commission (ASIC), regulates company and financial services laws and is part of the SBR program in Australia. In 2010, ASIC had started voluntarily filing of financial statements in XBRL. Along with XBRL, a human readable version, either PDF or paper format was also be submitted.
In 2015, ASIC opened up for inline XBRL filing thereby eliminating the need to submit financial statements in dual formats. This move reduced the burden on companies.
The experiences of these agencies are prompting many other regulators to consider inline XBRL as part of their XBRL filing program. The SEC is one of them. Inline XBRL looks promising and certainly addresses the concerns of data users. For reporting requirements where fixed formats cannot work well, adopting inline XBRL definitely adds value.
The process of creating inline XBRL is no different from creating a native XBRL document if you are using integrated software like IRIS CARBONTM.
Reach out to us if you want to learn more.