Four Reasons to Start Filing in iXBRL Today
Companies in the US currently file their 10-Qs and 10-Ks in dual formats- EDGAR HTML (human readable) and XBRL (machine readable). On June 13, 2016, the SEC announced that companies can now voluntarily file in a new format named Inline XBRL (iXBRL), which is both human and machine readable. The mandate will be compulsory for companies over a three-year phase-in period beginning 15th June 2019.
Here are 4 good reasons why you should consider transitioning to iXBRL sooner rather than later.
A more streamlined document preparation process
The creation of 10-Q and 10-K documents is a highly repetitive and deadline-driven process. Most companies prepare their compliance documents in Word and Excel, and send their files to a financial printer who then converts them into two separate document formats- EDGAR HTML and XBRL. These are two separate documents, typically worked on by different teams, and in different software platforms. Throughout the process, as emails are exchanged between the company and the financial printer, the separate EDGAR HTML and XBRL documents go through multiple rounds of revisions, resulting in multiple versions of each. Finally, when the 10-Q or 10-K is filed with the SEC, the EDGAR HTML document is viewed in a browser, while the XBRL data is rendered separately in an Interactive Data viewer.
With iXBRL, the EDGAR HTML and XBRL documents are combined into a single document, thus eliminating the duplicative aspect of the filing process. The convergence of the two documents will reduce the work involved and result in a more streamlined process for companies.
Companies who use a cloud SaaS solution will have an even more streamlined process as they will be able to prepare and review their iXBRL document in one centralized place.
We decided late in the first quarter of 2017 (Form 10-Q preparation calendar) to move forward with the use of iXBRL. I was impressed as a user with how smoothly this occurred in IRIS CARBON. It was really as easy or more efficient with than my prior effort with dual format filings
LARRY DEGEN
Interim Chief Financial Officer and Secretary
MGC Diagnostics Corporation
Easier review process
Before iXBRL, companies had to review two documents (EDGAR HTML and XBRL). The documents contained the same information, but because they were created and revised separately, extra time had to be spent in the review process to ensure that the information remained the same. With iXBRL’s single document, extra time to reconcile documents won’t be necessary. Another advantage of iXBRL is that the reviewer will be able to see the tagged financial data in the familar context of the HTML document, and will be able to review the traditional information at the same time as the XBRL information.
iXBRL has saved 1/3rd of my review time
GLEN MILLER
Chief Financial Officer
Ben Franklin Financial Inc.
Always one source of truth
When the HTML and XBRL documents are separate and not linked, companies must spend time to reconcile the two documents, to ensure that there are no material differences. During the preparation and revision stages, when there are multiple versions of both documents going back and forth between the company and the financial printer, the likelihood of errors is increased. In the example below, the HTML and XBRL documents are not in sync.
Extract from HTML
Extract from XBRL Rendering
Extract of XBRL Rendering: With iXBRL, when the HTML and XBRL documents are combined into one document, there is no chance of an error of this type.
Increased investor attention
The move to iXBRL reflects the SEC’s increased focus on data quality. By filing one document instead of two separate documents, fewer errors will result. Since the XBRL files and the HTML document will no longer be in different locations, users can view and analyze this data simultaneously, in a familiar HTML format. iXBRL allows investors to go through a smart and interactive document and fosters easy compatibility and analysis for stakeholders inside and outside the company. Not just regulators but anyone can access iXBRL financial reports of companies for easy benchmarking and compatibility.
Smart and Interactive View of an iXBRL Document
IRIS CARBON®, is a SaaS disclosure management platform bundled with highest quality services. The platform allows users to prepare and submit filings directly to the SEC, including several EDGAR, XBRL and iXBRL form types.
