The US Securities and Exchange Commission (SEC) declared significant changes to its reporting prerequisites for funds and operating businesses in June 2018.
The necessary changes imply that the operating firms would use inline XBRL or iXBRL while filing a financial report as well as by funds companies while filing return or risk summaries.
How iXBRL is different from XBRL
XBRL document requires a rendering engine to present the data in a human-readable format, whereas iXBRL document can be opened in any normal browser.
Though the shift to iXBRL would come into effect in the future over many years, there are many reasons why iXBRL is beneficial for financial reporting.
Benefits of iXBRL reporting
There are many benefits of iXBRL reporting. According to a current Financial Executive Podcast, you will find the perspectives of several XBRL professionals who talk about the new iXBRL prerequisites from the SEC. Some of the top benefits are:
#1 Less duplication
With the SEC’s declaration to start iXBRL filing for operating businesses and funds, it would lessen the reporting load for some organizations because, until that time, separate HTML and XBRL reports filed.
With the use of iXBRL, the need for duplicate reports will not become necessary anymore.
#2 Enhanced quality of data
One of the major issues as observed by the SEC is data quality mistakes when it comes to submissions by the filers. When you have an iXBRL viewer, it must allow small and large filers to recognize the frequent reporting mistakes with ease leading to high-quality submissions and enhanced quality of data.
#3 Simpler evaluation
When organizations use consistent tags for the frequent reporting items, the shift to iXBRL must make it simpler for analysts and investors to make a comparison of the position and performance of numerous businesses, thus ensuring benchmarking a more user-friendly and faster process.
When you have an iXBRL portal in place, it ensures the transparency of the company and financial data to investors. Standardized and structured data enable a simpler comparison of business reporting as well as evaluation.
#4 iXBRL is to stay for a long time
It is true indeed that iXBRL will stay, at least in the future. With many regulators across different nations embracing iXBRL for financial reporting, iXBRL’s recognition and popularity will not fall in the days to come.
#5 Beneficial for SEC and software providers
Did you know that iXBRL provides quality of life enhancements concerning reporting procedures and quality of data? Then, it also benefits you when it comes to accessibility of data and cost.
Therefore, iXBRL will prove beneficial in the future. It is great news not only for regulators like the SEC but also for investors, software providers, as well as, analysts if you consider the bigger picture.
iXBRL is a step ahead of XBRL because the information captured via iXBRL is simpler for people to read.
That is because you can open iXBRL documents using any standard browser, while one can read XBRL documents only via an XBRL viewer.
Filers and regulators all over the world use XBRL for reporting business as well as financial details.
Today, more than 100 regulators use it in over 60 countries.
Did you benefit? Feel free to comment.