At end of last year (December 2011), Ireland’s tax collection authority (Revenue Commissioners) issued a consultation document on iXBRL. I have written a post of two on XRBL previously. XBRL is mark-up language (like XML or HTML) which has been specifically designed to assist in the electronic filing of financial reporting documents. If agreed as a global standard, XBRL would present great advantages for state agencies like tax authorities, company registries and statistical bodies. This is simply due to the fact that XBRL presents a common a relatively easy to use electronic way for businesses to file financial statements, without the need for any form of manual interference and without the need to send files more than once.
So what is iXBRL and how is it different from XBRL? iXRBL stands for “inline” XBRL. It is more or less the same as XBRL in that it uses tags to identify data within a file. For example, a tag would identify the figure for same in the statement of financial position. Using tags means that data can be intelligibly read using software, which makes data manipulation a whole lot easier. The only problem with tagged data is that is typically not human readable. Where iXBRL differs is that all the tagged data is “hidden” within a human readable document. For example, a PDF file of a company’s financial statements might include all the necessary tagged data. The major advantage of this is there no need to produce a separate special XBRL file. You can read lots more about XBRL and iXBRL here.
According to CIMA Insight (December 2010), XBRL (the html-type languages used to electronically transmit financial reports) is becoming very common place. XBRL is an XML type language (used on web pages and e-business) used specifically for financial reporting. The increasing use of IFRS, and a XBRL file which encompasses IFRS is undoubtedly helping the rise of XBRL. It is also a free to use language, which helps too. So does XBRL do or offer?
The key advantage is that is provides a common and agreed method to file financial reports in all kinds of places. Using the main statements required under IFRS for example, anyone with a web-browser can make sense of the data in the financial statements and manipulate the data as required. The US stock exchange and the UK tax authorities are just two who already use XBRL. Indeed many authorities are likely to make it mandatory in the near future. By filing financial reports in XBRL format, many agencies could in theory use the one filing for multiple purposes – simply because the filing is electronic.
Although XBRL is being driven by regulators and external financial reporting, it could also streamline internal accounting processes. For example, a large organisation may have non-standardised financial reports, which could be standardised used XBRL – assuming of course a standard reporting mechanism/format could be agreed.
For more detailed information, check out http://xbrl.org/