XBRL (eXtensible Business Reporting Language) is simply a language for financial data and electronic communication of business globally. As among the families of XML language, it has become the means of communicating vital information on the internet and between businesses.
Using eXtensibe Business Reporting Language for filling accounts isn’t new. Companies have been accepting dormant and abbreviated accounts from audit-exempt companies for a couple of years through template-driven systems.
Providing a lot of benefits in the communication, analysis, and preparation of business information, XBRL provides improved accuracy, reliability, greater efficiency, and savings to everyone involved in using or supplying financial data.
XBRL Taxonomy
A taxonomy is simply a starting point of XBRL accounting and reporting requirements because they represent digital versions of a given accounting standard. Main accounting standards have their own versions of digital taxonomy that companies use to prepare XBRL reports.
How XBRL Filing Works
The process encompasses tagging items of financial data with unique identifiers from a prescribed tab library. This allows easier comparison of important financial data across various industries and companies. It also enables more processing of data and efficient analysis.
Apart from filing requirements, XBRL may as well be used to facilitate communication between investors and businesses. By providing detailed info in a more standardized format, investors will gain an understanding of companies’ performance, enabling them to make better decisions when investing.
XBRL Filing Requirements
Filing XBRL is an intricate and tedious task, as a lot of technical details should be filled in so as to ensure a company’s financial statements are all in order. Because it is a complex process, most business owners, at times, feel overwhelmed whenever they see XBRL. Usually, panic sets in, and you may sometimes struggle to understand and follow the right steps.
If you require XBRL filing or accounting services, a team of consultants at BoardRoom may guide you through as well as help you with what you need to complete the process. Some of the documents that consultants can help you complete in XBRL format may include the following:
- Related group chart
- Annual report on Word files
- Balance sheet in the Excel format
- Loss and profit statements in the Excel format
What XBRL Does
XBRL helps to make reporting more efficient and accurate. It also enables unique tags to be associated with facts of reporting while allowing people to publish and consume reports to test them against logical rules and businesses.
Who Can Use XBRL?
The XBRL data availability helps users to go deeper and deeper in financial analysis, collect and view financial data, and, at the same time, perform peer comparisons and review time series data for variances. In addition, XBRL allows for the automation of collecting data and providing easier access to report financial statement data for a robust and detailed analysis with several companies within a short period of time.
Machines represent more than 95% EDGAR visitors, enabling several XBRL data users, like economic research firms, academic researchers, data aggregators, investors, financial analysts, auditors, and college professors, to name a few. But some users might not be aware that they use XBRL data since data providers they depend on use XBRL data in most, if not all, of their services.
Why XBRL Conversion is Necessary
XBRL applies to almost every company in Singapore. It is a type of reporting language used for financial statements by companies, which need to lodge accounts with authorities.
But unfortunately, XBRL conversion can’t easily be automated since its difficulty lies with reading the available data, not comprehending the language.
With XBRL conversion, your business will be free to enjoy financial statement preparation in XBRL format. It will also enjoy expertise in XBRL accounting, established from supporting more than 1000 companies. Apart from this, other reasons for XBRL conversion are:
1. Data Reporting and Collection
By simply using XBRL, companies as well as other producers of business reports and financial data may automate data collection processes. For instance, data from various company decisions with different accounting can efficiently, cheaply, and quickly be assembled if information sources have been updated to use XBRL.
Immediately, data is collected, and different kinds of reports through varying subsets of data will be produced with little effort. For example, a company finance department can reliably and quickly generate management reports, regulatory filings, and financial statements.
2. Calculation and Validation of Data
Through XBRL conversion services, you will be able to validate financial tags, which are used in the XBRL reports. This helps to ensure that there is dependency and accuracy in decision-making. Not to mention, it guarantees the following:
- More reliable data handling
- Cost saving
- Automation
- Improved analysis
3. Business Reporting Flexibility
XBRL enables flexibility to communicate specific concepts. Although it needs standardization of business concepts of reporting, it enables flexibility to extend the vocabulary of meeting individual circumstances.
Filing Financial Statements
If you own a business in Singapore, it would be best to understand the filing process of financial statements in XBRL. In order to do that, you will need to be conversant with a different template that ACRA (Accounting and Corporate Regulatory Authority) allows.
Mainly, there are three templates you can choose from. These include full, simplified, and FSH templates. Full templates are comprehensive and consist of about 210 elements, including information from financial statements and relevant notes attached to statements.
On the other hand, simplified templates have about 120 elements, but they still manage to gather data found in a financial statement. These statements are perfect options for businesses with less complex finances.
Lastly, FSH (Financial Statement Highlights) templates have two variants: insurance companies and banks. These templates are used when presenting key details in XBRL. Bank FSH templates have around 80 elements, whereas insurance FSH templates are the same as those of banks and have approximately 80 elements.
The Takeaway
From the above information, you can conclude that XBRL is a modern and advanced technology for business and financial reports. Data that has been analyzed in this manner is more accurate, all thanks to the vertical and horizontal control. In the future, XBRL will also be more common because of its transparency and simplicity.