XBRL – The Pathway to Compliance & Easy Financial Disclosure
eXtensible Business Reporting Language (XBRL) is a form of extensible markup language (XML) introduced to improve the quality of reporting and uploading financial statements and annual returns. XBRL compliance reporting maximizes the possibility of digitization, increased reliability, and comparability.
In the past year, the Malaysian economy has witnessed drastic changes in the financial reporting policies updated by SSM, where online (XBRL) reporting is considered to be the only safe and effective option. This is why, once mandated, companies will be required to prepare financial statements in the XBRL format and in compliance with Malaysian Financial Reporting Standards (MFRS) to facilitate easy comparability of data.
But what is the role of XBRL compliance here? Let’s find out.
XBRL and Compliance Reporting
Companies require a massive amount of reliability and accuracy when it comes to reporting and disclosure of financial data. With the regulatory environment becoming complex, companies are changing and updating their ways of meeting compliance needs. With a plethora of guidelines, compliance becomes extremely tricky. The most common challenges that businesses face in financial reporting include:-
- Automating routine tasks to reduce costs.
- Analyzing and comparing the data efficiently.
- Identifying the errors in the filling process rapidly.
- Focusing on data analysis and decision making.
- Obtaining secure data that can be entered automatically into the systems
This is where XBRL comes to aid.
- Reduces the Need for Manual Entry
Relying on manual processes for preparing and reviewing financial statements can prove to be time-consuming and incorporates a greater risk of errors. XBRL reduces this reliance, allowing businesses to spend more time on data analysis and decision making. XBRL does not alter the data to be reported. However, it changes the way it’s reported.
Fewer Chances of XBRL Errors
The quality checks of XBRL, along with an identifying tag for each individual data and taxonomy compliance established by SSM reduces the chance of errors. Moreover, it automatically checks and corrects information before final submission.
SSM’s mTool to Your Rescue
mTool is an excel-based preparation tool developed by SSM to generate and validate XBRL financial statements and annual reports. It benefits users by displaying financial information in multiple formats, including tables and bar charts. Similarly, the mPortal platform also comes in handy for preparing & analyzing data and generating reports.
XBRL compliance and Financial Disclosure
CRD, an International Integrated Reporting Council (IIRC), identifies seven fundamental principles to achieve transparency and accountability in financial reporting: materiality, completeness, accuracy, balance, clarity, comparability, and reliability.
XBRL format covers every single one of these principles and has digitalized financial reporting, making it more transparent than ever before. Transparency in financial reporting ensures better decision-making by private parties and policy creation by government agencies. It allows real-time disclosures by making essential and meaningful information accessible to interested users, including stakeholders, investors, and regulatory bodies.
The Growing Relevance of XBRL in Financial Reporting World
XBRL is a landmark in the history of financial reporting. It is a technological framework that provides tremendous benefits to businesses, regulators, accountants, and the general public if appropriately used.
To avail the benefits of XBRL, a trusted partner like DataTracks is all you need. Boasting 16+ years of experience, DataTracks has leveraged the technical skills and global expertise in providing XBRL compliance reporting and regulatory solutions meeting the SSM requirements.
To learn more about the services DataTracks offer, speak to a DataTracks expert at +65-31-583-654 or email @ email@example.com