The role of finance has changed. Not only are departments facing growing pressure to do…
The introduction of the XBRL and iXBRL standards for financial disclosure and reporting has paved the way for efficient, automated analysis of business information. For many enterprises, especially those with multiple entities, financial consolidation, reporting, and disclosure were already a time-consuming activity before industry standards such as the European Single Electronic Format (ESEF) became compulsory. Thankfully, achieving XBRL and iXBRL reporting compliance needn’t be another manual task on the finance team’s agenda. With a dedicated statutory reporting solution that supports both XBRL and iXBRL standards, ESEF-compliant financial disclosure can happen with just a few clicks.
XBRL is a worldwide standard for the application of unique, computer-readable tags to business data. These tags enable financial information to be processed automatically by software, increasing the efficiency of the process and enabling the derivation of in-depth insights with ease. Inline XBRL (iXBRL) tags have the same purpose but are invisible to the human eye.
Tagging financial data with identification codes is not a new concept, but the XBRL and iXBRL standards make it easier for different software packages to read and understand datasets in the same way.
Today’s busy finance teams already have a mountain of activities on their plate as they navigate a turbulent business environment and are increasingly relied upon to deliver strategic business insights. Financial data must be consolidated, presented, and disclosed as efficiently as possible, which, without an automated solution, can be a time-consuming task in itself.
The need to apply XBRL tags/iXBRL tags adds another level of complexity to the process. Finance teams must ensure reports themselves are not only accurate and in a relevant format for local accounting principles and internal stakeholders, but also converted to be compliant with XBRL and iXBRL requirements in preparation for disclosure.
Overcoming these challenges requires finance teams to embrace digital transformation, implementing solutions that replace lengthy, manual activities with a more automated approach. Software that manages the XBRL disclosure and reporting process – and beyond – can free up team members to focus on other more strategic tasks and, depending on its capabilities, deliver other time-saving benefits by helping you to:
When investing in XBRL management software, there are several key capabilities to look out for to help you streamline your financial disclosure process:
Though not part of the XBRL tagging process itself, the collation and consolidation of financial data from across the enterprise is a prerequisite of the disclosure process. While this activity can be (and often is) carried out manually, a dedicated financial consolidation solution makes light work of it. Going one step further, financial consolidation software that integrates seamlessly with your XBRL management process (or forms part of the same solution) enables you to prepare your data for tagging and filing with very minimal effort.
Each country has its own accounting standards with differing definitions. In XBRL reporting, taxonomies are used to define the specific tags which have been used within that particular standard. Your XBRL management solution should enable these taxonomies to be uploaded and extended (to suit your own requirements) with ease to minimize the time required in setting up definitions for the disclosure process.
The application of XBRL/iXBRL tags to accounts, reports, and filings should be a relatively quick process with minimal input required from users. After the initial setup of your solution is complete, it should be possible to apply many of these tags automatically, behind the scenes, enabling you to focus on other things.
Ensuring your reports are accurate and consistent is vital to successful XBRL reporting disclosure. Solutions featuring inbuilt workflows enable you to standardize the disclosure process and create complete transparency of progress. Ideally, automatic validation checks should be present too, alerting you to potential issues and allowing you to rectify problems before the final results are released.
Once the figures have been finalized, tagged, and validated, they are ready for disclosure. Look out for the capability to convert your reports and filings automatically into relevant formats, removing the need to manually take on the task and helping you ensure complete compliance is achieved.
Disclosing compliant XBRL and iXBRL filings needn’t be a challenge. With the right software in place, collecting, tagging, and presenting your financial results can be carried out with ease, letting you focus on more pressing matters. At Board, our leading decision-making platform, which unifies Business Intelligence, planning, and predictive analytics, features embedded XBRL and iXBRL capabilities, enabling you to manage the process with ease.
Find out how the Board decision-making platform enables you to achieve a fully integrated approach to consolidation and disclosure.