How XBRL will be the Future of Business Reporting System in Malaysia?
“The McKinsey Global Institute estimates that, compared with the Industrial Revolution of the late 18th and early 19th centuries, modern technology’s disruption of society is happening ten times faster and at 300 times the scale. That means roughly 3000 times the impact.”
Given the above statement, it’s a known fact that financial regulatory boards across the world have started adopting technology to improve the speed, ease of access, and transparency of their processes. At the forefront of this change is Digital financial reporting, which is indeed changing how businesses operate across the globe. One primary enabling technological innovation that’s driving significant change to the current accounting practices, processes, and methods is XBRL-based structured digital financial reports.
XBRL in Malaysia
As a measure to adhere to global standards and technological advancements, on 27th September 2018, SSM has launched the Malaysian Business Reporting System (MBRS). It’s an eXtensible Business Reporting Language (XBRL) based digital platform where all companies registered with SSM have the mandate to update their financial statements.
It’s here to stay
Here are a few reasons
Why are financial regulators worldwide, including SSM, opting for XBRL?
- It eliminates all paper-based reports, thereby eradicating any possibility of human errors.
- The taxonomy, instance documents, and data tagging will now follow a common and global standard. This makes it easier for investors and stakeholders across the world as well as within the country to understand the financial statements of different organizations.
- Understanding, generating, and updating the reports and sending them across will be easier and faster. This will increase the productivity of the accounts team.
- The label link base improves the readability of the statements. This feature enables even individuals with a non-financial background to interpret the data.
- It dramatically enhances the comparability, transparency, and decision-making for stakeholders as well as regulators.
How will it affect Malaysian Businesses?
Malaysia is one of the most important business destinations in APAC for corporations around the world. With the help of XBRL, the ease of access to financial statements is bound to increase. This will have a ricochet effect on the number of foreign investors showing more interest in setting up their base in the country. These results will not only increase the possibility of increased investments for home-grown corporations, but it will also improve the overall economy of the country.
What should organizations do?
Decision-makers and stakeholders across the country should understand the XBRL system and not be petrified about the same. XBRL is a structured way of digital reporting and it’s easy.
However, they should invest in equipping their team on XBRL’s taxonomy, units, concepts, elements, tagging system, and much more. Once a team is equipped with the necessary information, the implementation from an organizational standpoint will be lucid.
DataTracks, as a member of the XBRL consortium, has helped multiple organizations across the globe and inside Malaysia through a smooth transition. They leverage their 14+ years of XBRL expertise in providing the right solutions & consultation. If you’re looking for assistance, then DataTracks is the right partner. Please reach out to our team at firstname.lastname@example.org.