The CIPC, South Africa’s business registry, implemented its iXBRL mandate last year on 1st July 2018. Public, state-owned entities, qualifying private entities, closed corporations, and other qualifying entities are required to submit the Annual Financial Statement (AFS) in iXBRL format. But before we dive into the importance of structured data, let’s first try and understand what structured data really is.
Structured Data is defined as – “the data which conforms to a data model, has a well-defined structure, follows a consistent order, and can be easily accessed and used by a person or a computer program.”
In the context of compliance reporting, the SEC (Securities and Exchange Commission of the USA) defines structured data as – “data that is divided into standardized pieces that are identifiable and accessible by both humans and computers. The granularity of these pieces can range from an individual data point, such as a number (e.g., revenues), date (e.g., the date of a transaction), or text (e.g., a name), to data that includes multiple individual data points (e.g., an entire section of narrative disclosure). Structured data
can be created and communicated using data standards like XBRL, XML, and JSON, or generated with web and pdf forms.”Structured data provides numerous benefits. Vast amounts of structured data can be analyzed by software easily and with precision, thus reducing time and cost of manual processing. They analyzed structured data allows investors, analysts, and regulators to more easily and quickly access and compare that data across registrants, make better investing decisions, etc.
Introduction of XBRL, or eXtensible Business Reporting Language
Among the various standards, XBRL has become widely accepted as the de facto standard for business and financial reporting. An open-source standard, XBRL works with the use of taxonomies, which are created as per the XBRL standard specifications. In essence, a taxonomy is a dictionary of “standard tags” that can be applied to each data point in a financial statement of any company or issuer. This “tagging” tells the software what these data-
points in the financial statements represent and how they are related to other data points in the document. With XBRL, access to data is made more streamlined and reporting, timelier.iXBRL, a more recent variation of the XBRL standard, offers an added benefit – not only is an iXBRL document machine-readable because of the XBRL tags embedded in it, but it is also human-readable because iXBRL documents are generated in xHTML, a format which can be read on any browser.
Benefits of Structured Data (iXBRL)
Let’s look at how entities benefit from the filing AFS in iXBRL:
Easy to compare data:
With the implementation of the iXBRL format in the AFS, the comparison of data has become much easier. Here is an example of two mining companies that have reported ‘Sales/Revenues’, let us see how iXBRL processes this information on Sales/Revenues.
From the above visual, it is easy to understand that even though Newmont Mining Corporation has used the term ‘Sales’ and Randgold has used the term ‘Revenue’, both are mapped to the same tag in iXBRL.
Data accuracy:
One of the main benefits of the XBRL / iXBRL standard is its ability to clearly define business logic and validation rules, thus making the data highly accurate. Even if the human eye is unable to capture the lapse in the data being presented, once the AFS is reported in iXBRL format, inaccuracies or inconsistencies in data would get identified.
Structured data
These are just a few of the benefits of structured data. While an AFS in iXBRL certainly helps the regulator, this can also help companies. An easily analyzable AFS that is iXBRL tagged can reduce the analysis time and thus, expenditure of the company. Both, internal (MIS teams, data analysts, board of directors, etc.), as well as external stakeholders (potential investors), can benefit from the transparent and easily accessible company financials.
Start your second year of filing your AFS in iXBRL with complete confidence that reporting in a structured manner will only help your organization and make compliance streamlined. If you are yet to start filing your AFS as per the CIPC iXBRL mandate and would like to get some expert assistance to get started, we would be more than happy to help you.
