XBRL: A Boon for Business Owners and Investors
In today’s technology-centered world, companies are eradicating manual processes and moving towards automation, and so are financial statement users. Therefore, it is essential for financial statement preparers and users that high-authority data is available to them in a structured, digital format. That’s where XBRL comes in.
XBRL is a framework wrapped in tags and multiple quality checks that allow users to digitize data in financial statements, creating machine-readable reports. But is XBRL really as beneficial as they say?
Let’s unearth some of the benefits of XBRL for business owners and investors.
- Better, More Refined Quality of Information
Currently, business and financial analysts transcribe information from company financials into their models to derive insights. The problem here is that humans are prone to error.
As XBRL becomes a mandate, companies will be required to file a comparable, digital format, eradicating human intervention, allowing business owners and investors access to a higher quality of information. This will not only help them make better business decisions but also figure out areas that need more capital influx, for which potential investors can be approached.
- Simpler Evaluation
If business owners use consistent tags for reporting financial items, the transition to XBRL will allow investors to compare the position and performance of a company effectively. This will lead to a user-friendly, fast, and more straightforward process of evaluation.
What’s more, XBRL ensures standardization of company data to investors, which means the data available for comparison will be in a structured format, making it easier to evaluate.
- Shift to Data Analysis
With XBRL, companies can shift resource allocation from data collection to data analysis. This may lead to additional research opportunities. And these research opportunities will allow companies to discover trends and identify threats that are about to hit the industry, giving them time to prepare. As a result, not just one company but the entire business economy can be strengthened by transitioning to XBRL.
Benefits of XBRL Continue to Unfold…
XBRL is new to the Malaysian economy, so the benefits will continue to evolve in the coming years. A sane piece of advice regulators and company advisors are offering to businesses – transition to XBRL as soon as possible. It’s not going to be long till XBRL is mandated all across the country.
So why wait? Partner with an XBRL compliance and service conglomerate like DataTracks. Boasting a commendable experience of 16+ years, DataTracks has successfully delivered 1,95,000 reports to their global client base.
Speak to a DataTracks expert @ +60-392-126-125 and transition to XBRL TODAY!