What is iXBRL?
iXBRL is an abbreviation of eXtensible Business Reporting Language. It is a reporting format that assigns an electronically readable tag to individual items within business reports. These tags correspond with taxonomies which are like dictionaries of terms used in financial statements and other business reports. In a similar way to barcode technology, the computer reads the tag and finds information about the item – for example the value of a current asset on the balance sheet.
iXBRL is growing worldwide and has been adopted by many countries in accordance with their International Financial Reporting Standards (IFRS). Although there has been no date for which XBRL will become mandatory in Ireland, in the near future financial reports ordinarily submitted electronically or in hardcopy will be required to be submitted using iXBRL. This will allow businesses to communicate and compare financial and other types of information within and across companies.
How will iXBRL affect companies in Ireland?
iXBRL will be beneficial in terms of financial report preparation, analysis and communication. Currently, all financial and business reports are static. If analysis or comparison is required, the data must be manually extracted and re-entered into another program. This can be time consuming, costly and error prone.
If a report is published with iXBRL tags, the information can be directly extracted. A range of sections of the data can be detached and manipulated with increased reliability and minimum effort. This allows internal business communication along with intra business communication. The success of this electronic business information format is dependent upon an understanding of the benefits it can bring, especially in terms of improved quality of data for business decision making.
Revenue will certainly introduce the requirement for iXBRL tagged financial statements/computations and although a date has not yet been set for the formal introduction, a point to note is that while the UK the tax return deadline is after the Companies House deadline date in Ireland the tax return deadline is usually before the CRO filing date.
iXBRL rules for UK companies
UK companies are now required to file corporation tax returns electronically using iXBRL for both the tax return itself and the related statutory financial statements. This requirement has been in place with HMRC since 1 April 2011.
How Grant Thornton can help
Grant Thornton has experience in the conversion of prepared statutory accounts into iXBRL. We also provide advice and suggestions to companies on the implementation process in order to ensure successful execution. Also, if the HMRC’s iXBRL tagging requirement applies to your business, we provide a managed tagging service that can tag completed financial statements.
Contact
For more details you can contact Cian Blackwell, Partner or Sinead Donovan, Partner.
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