XBRL was conceptualized to standardize business and financial reporting. The primary objective was to make data machine-readable which was achieved by using XML technology. The basic usability of XBRL data for the human eye was initially achieved by following a concept termed Presentation Linkbase which allows you to create a tree structure between various items reported in a company-specific terminology. However, the XBRL report thus generated, though usable and machine-readable, is not a view-similar copy of the original document.
The need for iXBRL
The benefits of XBRL data are so huge that in no time, XBRL has now become a global phenomenon. As XBRL adoption is increasing and more user groups such as preparers, reviewers, consumers, etc. start using XBRL data, the need for a more simplistic view of information has become unavoidable.
Think of it as the difference between a regular cellphone and a smartphone. Everything works just fine in both, but the smartphone makes every operation so intuitive and simple.
Similarly, users of data prefer a display that replicates the traditional formats of annual reports and other financial documents. This has led to the development of a new but related specification called inline XBRL or simply, iXBRL.
With iXBRL, machine-readable information becomes human-readable. iXBRL hides all the technical jargon of XBRL and presents the user with an e-document that completely resembles the source document or the document before XBRLization.
What is an iXBRL document?
iXBRL is simply a computer-processable and viewable document that isn’t miles away from a PDF, except that it is viewed in a browser. An iXBRL document is a well-formatted HTML file with the XBRL information embedded beneath. It has a display layer attached to the XBRL document which makes it easily readable by the human eye. In short, it is a win-win situation.
iXBRL works well for unstructured information where it is difficult to use a fixed format. The most common examples are financial statements prepared by individual companies. These statements are based on accounting principles, so while the overall framework is standard, entities have the flexibility to present the information as they desire. iXBRL simply renders the reported information using the original source document at the front end.
How can you benefit by using iXBRL
There are quite a few, however, the 2 main pain points addressed by iXBRL filing will be:
1. iXBRL will make your compliance reporting process less painful by removing dual-format submissions
2. iXBRL will also give investors/research analysts easier access to the underlying information on your company that they might be unable to extract currently with XBRL filings.
Points of caution for preparers while using iXBRL
Though providing a further link in the Standard Business Reporting evolution process, iXBRL comes with a note of caution:
1. While preparing an iXBRL report, the preparer must ensure that there is no important information left untagged. If a piece of information is not identified using an XBRL tag from the taxonomy, the untagged information, though visible in rendering does not get extracted as XBRL data.
2. Similarly, in the reverse scenario, any additional information which is not part of the source document, can still be captured in the iXBRL document lying as XBRL data, but is hidden from display.
With greater XBRL adoption for financial reporting and more detailed and granular reporting programs, the complexity of reporting methodologies is on the rise. Regulatory reporting is all about coping with these technical changes. Educating yourself on iXBRL is part of the job, along with implementing systems to use it.