Why HMRC Made the Right Decision to Choose iXBRL over XBRL

XBRL (eXtensible Business Reporting Language) is an open technology standard for business reporting.  XBRL is based on XML (eXtensible Markup Language).  iXBRL (Inline XBRL) is a development over XBRL, where the key enhancement lies in the rendering of tagged facts encoded in an XBRL document.  XBRL and iXBRL standards exist with the same objective – seamless exchange of financial data.  The main advantage of iXBRL over XBRL is that iXBRL documents can be rendered directly by browsers and printers.  On the other hand, only specialized XBRL viewers can render XBRL documents.

Several countries across the globe have adopted XBRL as their standard for financial reporting.  However, UK is the only region in the world where iXBRL filing is mandatory.  In UK, HM Revenue and Customs (HMRC) requires businesses to submit their financial statements and tax computations in iXBRL format.

HMRC made decision to choose iXBRL over XBRL

The key advantages of iXBRL include :

  • Simple Filing Process: In certain regions, companies are expected to perform financial reporting in XBRL as well as HTML format for human readability.  For instance, Securities and Exchange Commission (SEC) US, currently enforces financial report filing on HTML as well as XBRL formats.  This makes it a two-step process.

iXBRL adoption makes financial reporting a single step process.  The same iXBRL file lends itself to machine as well as human readability

  • Simple Change Management: The filing process described above has another drawback when changes need to be incorporated in the files.  Content changes need to be replicated in two files.

iXBRL makes change management simpler.  Since there is only one file to be updated for changes, it is less time consuming, and less prone to errors.

  • Readability:  One of the important drivers for XBRL adoption is to enforce machine readability of financial data.  However, it is preferable that such machine readability is achieved without any compromise on human readability of the same data.

iXBRL achieves the dual objective of making financial data machine readable as well as human readable.  The iXBRL file submitted for filing with HMRC lends itself to computer-readability, as well as human readability by people on-screen or in printed form.

The benefits of iXBRL have prompted Ireland to consider this as their standard for financial reporting.  SEC is also considering adoption of iXBRL, as mentioned in an article by Tammy Whitehouse in Compliance Week, May 14, 2012 [1]

Preparation of iXBRL files is a little more complicated when compared to preparation of XBRL files.  However, this additional effort is insignificant compared to the effort involved in maintaining two versions of the same report.  This is one of the main reasons that prompted HMRC to adopt iXBRL over XBRL.

DataTracks UK is a leading provider of XBRL services to Accounting Firms and Businesses.  DataTracks (www.datatracks.co.uk) provides iXBRL Managed Tagging Services to help companies convert their financial statements and tax computations to the iXBRL format.  All DataTracks services are provided through an easy to use e-commerce portal.  User can register, create entities, place orders, pay, upload files and download iXBRL output when ready.

To find out more about DataTracks, visit www.datatracks.co.uk or send an email to   enquiry@datatracks.co.uk

The views expressed are that of the author’s and DataTracks is not responsible for the contents or views expressed therein. If any part of this blog is incorrect, inappropriate or violates the IP rights of any person, please alert us at ceo@datatracks.co.uk. We will take immediate action to correct any violation.

Source :

Tammy Whitehouse, Compliance Week, 14th  May 2012

http://www.complianceweek.com/sec-explores-option-for-2-in-1-filing-method/article/240994/

 



Subscribe by Email