Regulators in South Africa and other parts of the world still collect Annual Financial Statements (AFS) in PDF and paper formats. However, there is increasing need for adapting to an international standard of accurate, efficient and fast digital business information exchange, like XBRL (eXtensible Business Report Language). XBRL is a non-profit voluntary program that aims to become the worldwide standard for electronic business reporting systems, and is already in use by some regulators in various countries such the USA, Japan, and the United Kingdom.
The digital reporting output of Inline XBRL (iXBRL) allows filers to insert financial XBRL data directly into a programmed document in HTML format. It is a method of changing merged balance sheets, income statements, and statements of cash flow into machine-readable data, while simultaneously not compromising on human readability. The introduction of iXBRL in South Africa is an absolute necessity in enhancing the exchange of financial information between business and regulatory bodies, while also accommodating small filers. It will allow companies to file their AFS digitally, in a more structured format, and do away with the outdated PDF reporting format. iXBRL will allow for business information to be posted safely online, enabling scrutiny, and affording accountability and openness of important information.
The mandate of iXBRL for financial statements will ultimately minimise the burden of compliance, reducing multiple submissions to different regulators. It will also ease the administrative load on businesses when it comes to regulatory reporting. This also allows businesses to provide financial information in a familiar format they can control without altering the preparation process for their documents.
The South African Companies Intellectual Property Commission’s (CIPC) implementation of the open data format, iXBRL, is a step in the right direction. The CIPC’s broad mandate of collaboration with various entities makes it imperative for those entities to choose Inline XBRL over conventional XBRL in order to establish human readability, and have a standardised data structure accurate for analysis. The CIPC’s aim to create an environment for doing business with simplicity and more regulatory certainty is in line with the ideals of iXBRL. The reporting language will help CIPC meet its goals through the National Development Plan (NDP) objective of world class company legislation organization by adopting a recognised international standard of business communication.
Seeing as Inline XBRL has been in tailored use for a decade now, the time is right to make the switch to the efficient, cost-effective standard. The introduction of iXBRL in South Africa will reduce compliance costs for the filers and at the same time, allow for improved data quality and greater accuracy.
DataTracks upgraded its DMS software to include South Africa’s CIPC taxonomy well before the upcoming mandate, wherein all qualifying companies in South Africa are required to file their AFS in iXBRL. With proven experience in working with iXBRL in other countries and for different regulatory authorities around the world, DataTracks offers the perfect solution to meet all your compliance needs. For more information, visit www.datatracks.co.za, or you can reach us at email@example.com. We would love to hear from you!