There are certain mistakes related to extensible Business Reporting Language. If you are in anyway related to XBRL conversion, it is important to alleviate them. Let us see most common among the misunderstandings and errors of XBRL tagging.
XBRL often changes its course that is hard to follow
While it takes considerable amount of time to learn XBRL, the formal XBRL taxonomy related to this is being kept up-to-date by the Securities and Exchange Commission or SEC. but the changing times has witnessed such discrepancies being fixed by advanced applications – making it easier for the users to follow the latest updates easily and understand them thoroughly.
XBRL is to serve the filling procedure on temporary basis owing to politicians
The benefits of XBRL are limitless. It has all the right elements to be pervasive despite the fact that most of the political entities restrict its usage within SEC’s drive for the filling process. The catch is that, in this age almost entire commerce platform of the world depends or are shifting interests towards the data models that are interactive, which are more or less like the XBRL. The idea that XBRL is here to stay will be realized once users understand that any type of data will be accessible for definite kinds of analysis. Also, there is the urge to follow a familiar path and gain newer insights. The fight to curb XBRL amalgamation will fade off once the financial industry turns extremely comfortable with XBRL and relies on a consistent methodology
It is a software piece
It is in fact not. Well! You need software for creating XBRL documents and to analyse them. The software program is termed as publishing software. A rendering tool is needed to read documents in this format.
It is a novel accounting concept
It can be considered as a standard of information, not a new concept of accounting. It is another newer way of reporting the same information in more meaningful and richer way. XBRL accounting obviously works well with the accounting concepts already existing.
It is expensive
Implementing this is always a wise decision to make. In India, the costs are very less when compared to US. Listed companies have to incur heavy costs as the user licence for publishing software will definitely be more. So, the best option for such companies is to outsource such tasks to a professional company indulged in the same. They will be equipped with all kinds of software programs and tools including XBRL conversion software.
It is easy to learn
Learning extensible Business Reporting Language takes time and it's not that easy. Fresh recruits are normally given training of at least 3 months to provide them with the necessary domain knowledge and acquaint them with XBRL conversion tools for financial reporting. You can't make the workforce do miracles by training them for a week.
Somebody owns XBRL
No. It is an open source and completely royalty free. Nobody owns it. The said is one of the main reasons of its increasing preference and favouritism. The evolving of it owes to the collaboration between technologists and accountants.
It is going to increase the compliance burden
Actually, adapting it drastically minimises the compliance related burden on the filers. However, a fact to be understood is that initially the burden can be a bit higher as there can transition issues but in course of time, it will settle down and smooth sail.
No clarity as to how each company uses XBRL while SECSEC has no concrete solution do deal with it
Yes, unfortunately that is more or less the case. It is one of the common xbrl mistakes. Because, the SEC rules allow customized tags to be used by the companies and in some cases there is no clarity within the guidelines specified for tagging. Now, if the tags are inaccurate the analysis that follows the filings by XBRL EDGAR will also be inconsistent. The good news is that the SEC takes care of such issue through the new XBRL taxonomy format and also by conveying filers with apt messages. The clients are being assisted by the filing service professionals to utilize XBRL with ease and this in turns helps to bridge the gap.
It is to be feared
Even the minutest of errors will get highlighted with this. Also, chances for mistakes to happen will be minimum as pre-validation is done for the fillings. Also read our blog about importance of XBRL Services.
One cannot depend while processing and filing XBRL into EDGAR and also, it takes so much time
It is pointless to expect XBRL and EDGAR going hand in hand. The XBRL is engaged in various functions when the filing tool is being used. However for the sake of saving time and achieving precision, there are a wide range of tools to choose from. Several companies come up with applications which ensure filing periods and are kept alive for quality control and approval throughout the process till its completion. Plus, on-demand consultation and services for proofing are offered in different formats to enhance accuracy and reliability in concern to filing periods.
Documents which are formatted by XBRL doesn’t allow automated updates
XBRL solutions can be vouched for providing efficient content updates that weave in tags within documents to fill latest data automatically. As a matter of fact, one has long way to go before such objective has been realized. By depending up on professional service for this matter, the automation will show its wonders pertaining to efficiency and reliability. Once XBRL automation works, its advantages will be foremost lapped up by the providers in terms of gaining rewards.
There is not much difference in using wrong XBRL filings
The filers will be affected the most by such conception pertaining to the rules for xbrl filing. Inaccurate coding is likely to attract chaos or imprecise company data while public distribution. Mistakes can hamper decision-making process in relation to investments since most of the analysts and investors depend on XBRL to acquire company details. Moreover, the SEC is still amateur in handling Big Data analysis tactics while comparing company filings and for retaining consistency internal wise. This has given rise to inventive kind of action by SEC whereas the agency affirms to upgrade breakdown and implementations in the course of the year. It is cost effective to rely on the right filing and can save enough from public confusion or SEC administrative actions.