iXBRL for SEC filings - Key Information
In what could be a game changing development for financial reporting and filing procedure, the SEC (Securities and Exchange Commission) has stated that companies must use Inline XBRL to file their structured financial statements online. This ruling by the SEC in 2016 June for SEC inline Xbrl would mean that the companies when they file their annual and quarterly financial reports must do in an integrated HTML format allowing for greater flexibility.
This is in fact a little confusing to understand and if you wonder how that is even possible, let us break it down for you further.
What is inline XBRL?
Most of the business and financial data reporting is done as an exhibit to XBRL filings as of now. However, the format is less-friendly for most to understand and interpret. The unmatched growth in technology and a demand for a simpler and more flexible system for submission made room for the iXBRL. It is a versatile format by which Extensible Business Reporting Language can be embedded into HyperText Markup Language (HTML) and through this, now the organizations are at the ease to integrate XBRL data in their HTML filings.
What are the benefits of inline XBRL?
It strives to modernize the entire process of business filing and aims to bring in the much needed accountability, ease of access and transparency in financial reporting. As it can greatly reduce the cost involved in storing, interpreting and using the data, it provides for better and effective usage of the data. Inline extensible Business Reporting Language is also aimed to do away with the complex and tiring procedure related to data filing and replace the same with a more transparent, user-friendly and simplified system for business data filing. As iXBRL for SEC filings can considerably improve the quality of the data in terms of its structure and usage, it tries to improve the awareness about its unparalleled utilities.
Can iXBRL be learned easily?
With the introduction of a new technology comes something new to learn and so is the case with iXBRL, as well. While it can be considered semantically similar to eXtensible Business Reporting Language, it is not the same. However, it is important to learn and understand iXBRL that acts as a sort of bridge and tries to help transforming XBRL tagging to computer legible layout. However, with the support of a reliable financial process outsourcing partner, one can transfer the responsibility of compliant and reliable submissions of sensitive business and financial information. The assistance from a professional can be extremely encouraging and supporting during and after the transition phase. It would never hurt to have someone who understands the technicalities of such a transmission for a smoother and trouble free transition process.
Is iXBRL a mandatory requirement?
As of now, the Securities and Exchange Commission has not made is a mandatory practice while filing the financial and business data online till 2020 for certain companies that meet certain criteria. This has made XBRL conversion services in huge demand. It has been maintained by the SEC that companies that are comfortable filing their data in the previous formats can continue to do the same till the trial period gets over. Once the trial period gets over, the Securities and Exchange Commission would make it a mandatory practice for all the organizations regardless of the criteria. From a strategic point, it is wise and advisable to begin the transition as early as possible. Since it is a new technology, everyone needs time to adapt and understand it and the transition can be easier now. Hence, companies wanting to avoid the rush and confusion can start the transition at the earliest.
What are the technical requirements for inline XBRL filing?
The SEC has mandated certain requirements for the transition. The technical requirements to start filing business and financial data on inline XBRL are updated on the SEC website.
The SEC has brought in a change that has the potential to entirely change the way financial and business data is seen, understood and interpreted. This is however for the better for companies that want to take advantage of the huge data they have with them and to use it to further expand their business.
Some important facts that you should know about iXBRL
- All forms containing financial data should be registered in iXBRL with the SEC.
- The SEC rules remain the same. But now an iXBRL document needs to be generated and filed.
- Businesses need to file company extensions apart from the iXBRL document.
- iXBRL tagging does not demand a modification of information.
- You may require software to extract XBRL data from iXBRL files.
- The syntax of iXBRL documents should be compliant with the specification of XBRL 1.1.
- You can view XBRL documents on any browser.
- For viewing tagged facts along with XBRL properties, you will need special programs.
Hope you have gained adequate knowledge on iXBRL for SEC filings and its benefits. We believe this comprehensive guide will greatly help you to process your data, accurate accounting, and flawless financial reporting.
Also, don’t forget to bookmark the technicalities involved inline XBRL filing mentioned above. This technical nitty-gritty will assure properly structured human and machine-readable financial data you can use further for analysis.
Since the process requires professional guidance, contact an expert XBRL conversion service provider if you ever need assistance. They can take care of your financials most effectively, ensuring the utmost quality and accuracy in the reporting.