XBRL Vs. iXBRL and Transition to inline XBRL as per ESMA Mandate

XBRL or eXtensible Business Reporting Language

XBRL or eXtensible Business Reporting Language is a freely available, open-source, global technology standard for exchanging business information digitally. This standard, which has been adopted by over a hundred financial regulators around the world, makes data machine-readable, increases data accuracy, and facilitates easy comparisons and analysis. The XBRL Specification is developed and maintained by XBRL International, Inc. (XII).

Word or PDF financial reports are converted to XBRL through tagging of the financial report to a standard regulator prescribed ‘taxonomy’. This tagged information is presented in an XML format called an ‘instance document’ which is encoded to be machine-readable only.

Below is an extract of an XBRL file

XBRL2

Machine-readable, but clearly not human readable!

Enter Inline XBRL or iXBRL

The Inline XBRL (iXBRL) specification was developed as an ‘upgrade’ to the XBRL specification, to make documents readable for both humans and machines.

iXBRL, also called XHTML, is a format that has XBRL data embedded in a well-formatted HTML document. The basic idea of developing iXBRL is to allow companies and preparers of financial reports to retain the original view or formatting of the source document while including XBRL tags in the document that machines can extract and read. The XHTML representation of the information is what aids the document to be human-readable.

iXBRL was originally developed by XBRL International (XII) to meet the requirements of the UK’s HMRC. It is now preferred for financial regulators to adopt digital reporting standards.

Below is an extract of an iXBRL document.

iXBRL1

Human readable, and machine-readable!

The ESMA iXBRL Mandate

The European Securities and Markets Authority (ESMA) has pushed for the digitization of data and financial information in a single electronic format under the EU’s Transparency Directive. The European Single Electronic Format (ESEF) mandates that from January 1st, 2020, all public companies in the European Union use a single electronic reporting format, iXBRL, to report their annual financial statements.

Transition to inline XBRL

While XBRL solutions have been available in the European markets for a longer time, the ESMA ESEF mandate is the first one that requires issuers to prepare Inline XBRL documents. iXBRL solutions are HTML-based solutions that allow the company’s annual report to look exactly the way they are in Word or PDF, with added XBRL tags embedded in the document, as per the ESMA taxonomy and guidelines, so that systems can consume the tagged data easily.

iXBRL has come as a blessing for CFOs who have been wary of the way XBRL looks. Inline XBRL provides a visual, human-readable HTML output format that CFOs can easily read, while the XBRL tags are nicely hidden in the back for machines to read. Some solutions also provide inline XBRL previewers, that allows you not just to eyeball your document, but also to see the XBRL tags behind the disclosures easily!

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