Back in June 2018, the U.S. Securities and Exchange Commission (SEC) announced changes to reporting requirements for funds and operating companies. The changes mean that Inline XBRL (also known as iXBRL) will be used by operating companies when filing financial statements and by funds when filing risk/return summaries.
Although the transition to iXBRL will be implemented in stages over the coming years, there are a whole host of reasons why the move to iXBRL is an exciting and important step in when it comes to financial reporting.
How is iXBRL different to XBRL?
In short, XBRL, also known as eXtensible Business Reporting Language, is a form of XML (Extensible Markup Language). It is an open standard for financial and business reporting.
iXBRL, also known as Inline XBRL, is often seen as a step ahead of XBRL, as data captured through iXBRL is much easier for humans to read. This is because iXBRL documents can be opened through a normal web browser, whereas XBRL documents can only be read through an XBRL viewer.
What are the benefits of iXBRL reporting?
There are lots of different benefits that can come from the adoption of iXBRL. In a recent Financial Executive Podcast, Christopher Westfall outlines the views of a number of different XBRL experts who discuss the new iXBRL requirements from the SEC. Just some of the advantages of using iXBRL that were discussed during that podcast included:
What’s next for iXBRL?
Although no-one can predict what the future will bring, it’s fairly safe to assume that iXBRL is here to stay, at least for the foreseeable future. With a variety of regulators across different countries adopting iXBRL for reporting purposes – including the UK and Ireland – iXBRL’s popularity shows no signs of slowing down.
Given the quality-of-life improvements that iXBRL can offer, not only in terms of data quality and reporting processes, but also when it comes to data accessibility and cost, any future with iXBRL in it should be good news not only for regulators such as the SEC but also for software providers, investors and analysts more broadly.
DataTracks has years of experience providing both XBRL and iXBRL reporting solutions to clients across a number of different jurisdictions. Find out more about the benefits of XBRL or iXBRL reporting for your business here.