How Does iXBRL Affect My Business’ Accounts Preparation and Reporting Process?
From 1 January 2010, legislation has been in place in the U.K. that requires companies to file their accounts and computations with HMRC in Inline XBRL (iXBRL) format in respect of returns submitted on or after 1 April 2011. There are very limited exceptions to this rule.
Although this legislation has been in place for a number of years, it’s natural for businesses to ask what it actually means to convert accounts to an iXBRL format and whether the act of converting a business’ accounts will have any impact on the internal reporting process.
This article provides further information on how iXBRL interacts with your business’ internal reporting.
What is iXBRL?
Inline XBRL, known as iXBRL for short, is an offshoot of XBRL, a computer language that has become known for its use in financial reporting. XBRL data has many advantages, from increased accuracy of data to the fact that it’s often easier to analyse data in an XBRL format.
Although XBRL tagged data is machine-readable, iXBRL goes one step further and allows data to be read by humans as well. This makes it a popular format for filing with regulators across the world.
Will iXBRL change my business reporting process?
Thankfully, tagging accounts and converting them into an iXBRL format should not have any impact on your business’ internal reporting process.
This is because only the finalised accounts and computations need to be iXBRL tagged, leaving businesses free to compile, revisit, and redraft their accounts as they usually would. As such, think of iXBRL tagging as an extra, separate task that businesses need to undertake once their financial statements are fully prepared.
It’s also worth noting that the process of tagging accounts should not have an impact on how a company chooses to present its financial statements. This means that companies can continue to use their preferred layout, branding, and terminology for their accounts.
Getting your business accounts tagged
Once a business has the final version of its accounts, consideration needs to be given as to how these figures will be tagged.
Usually, a business doesn’t have to know the ins-and-outs of how XBRL and iXBRL tagging works, as the tagging process itself is carried out by other parties, either through commercial accounts or tax preparation software or through the use of an outsourced managed tagging services provider.
If you don’t have access to software that can tag your accounts for you, then outsourcing your iXBRL tagging needs can be a great option. Managed tagging services providers, such as DataTracks, are specialists that can take your business’ accounts, whether they’re in pdf, excel, or word format, and convert them into an iXBRL tagged file that can be filed online with HMRC.
Outsourcing can also be a very affordable option. DataTracks, for example, has a range of different pricing options designed to suit the needs of all sizes of businesses, from small businesses that only have accounts that run to a few pages to much larger multinationals who might need several group companies’ accounts tagged.