Global Connect Admin B.V in partnership with the DNHK are holding a German webinar on 15 June 2022 at 12:00, titled “Einführung in Global Connect Admin BV & Global Connect Consultancy BV Ein kurzer Überblick über Amelkis XBRL. Register on the following link: https://lnkd.in/eSKqWcQg #webinar #xbrl #german #globalconnectadmin #globalconnectconsultancy #DNHK
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From paper to digital, from local to international standards (such as IFRS). Annual changes are no longer a surprise for companies. In addition to local rules and standards, more and more companies are confronted with international innovations, such as the influence of the Standard Business Reporting (SBR) system. For example, the XBRL format is not new and is not mandatory for everyone. Yet, it is fiscally helpful to keep an eye on updates regarding XBRL. This article briefly explains what XBRL is all about and how you can prepare for any (future) obligations.
XBRL in a nutshell
XBRL (EXtensible Markup Language) is an open international standard for digital business reporting. Millions of XBRL documents are added every year, with paper reports replaced by more effective and accurate digital versions. With XBRL, reporting terms can be authoritatively defined. Furthermore, you can represent the contents of financial statements, compliance, performance and business reports. For example, you can convert paper, PDF, and HTML-based reports into a digital XBRL-format in no time, allowing for quickly and accurately moving information between organizations. Therefore, using XBRL allows more people to use, share and analyze the data.
With XBRL, organizations can publish reports to ensure that the content can be accurately consumed and analyzed. Following a set of business and logical rules will go smoother and captures any errors at the source, ensuring error avoidance. In addition, it is crucial to ensure that the data provided conforms to advanced pre-defined definitions and taxonomies, which vary by country. The user can customize language and currency in their preferred style as well. Finally, comprehensive taxonomies and accurate tags allow for continued preparation, validation, publication, exchange, consumption and analysis.
XBRL in the Netherlands: From Micro to Large Enterprises
As of the financial year 2016 (1 January 2017), micro and small enterprises are no longer allowed to deposit publication documents via paper. In the Netherlands, electronic deposits are made through SBR, a digital delivery via Digipoort, by the intermediary or entrepreneur. In addition to this SBR method, entrepreneurs can also use the online service of the Dutch Chamber of Commerce, where they can deposit annual reports.
From the financial year 2017 (1 January 2018), the mandatory digital depositing also applies to medium-sized companies, except for medium-sized subsidiaries with a large company or listed company as a parent company. Large companies will still be excluded from the obligation in 2021.
Meanwhile, listed companies must adhere to the European Securities and Markets Authority (ESMA). ESMA prescribes that European listed companies must file their deposit accounts from the 2020 financial year based on ESEF (European Single Electronic Format).
At present, further mandates of XBRL and ESEF are still underway, with delays related to the current pandemic. Nevertheless, the first official Dutch ESEF publication was included in February 2021. Furthermore, SBR has set goals for organizations in the Netherlands to help exchange data in a structured, standardized and electronic manner according to a fast, effective and error-free method. SBR will continue to collaborate with the Dutch government. However, they will also collaborate with other organizations.
The technical aspect of XBRL and XBRL-based software is often underestimated. Especially for large international companies, a good eye for detail can make all the difference in complex situations. XBRL itself is not a commercial product. However, XBRL-certified organizations and software vendors offer specific applications and services. They can significantly speed up and simplify the processing process. An example of a software supplier and service provider is Amelkis. With the Amelkis XBRL software, companies can import PDF registration documents and quickly convert them to HTML. In addition, they offer workshops for full software support. Therefore, they help hundreds of organizations every year with XBR-related matters, such as exchanging data between systems and periodically compiling reports from various sources.
In the end, there are several advantages to invest in commercial XBRL software. For example, the larger and more complex a company structure, the more tags and details apply. Subsequently, the ESEF requirements and the accounting standards selected by the organization must also be taken into account. With XBRL-software, you can process XBRL-based data in any XBRL-enabled software. In addition, the XBRL format is based on taxonomies, with tags depending on the need or demand. In addition, to save much time, you do not always have to re-enter specific data in the software.
Making the right choices can be challenging. In addition, constant updates from SBR, XBRL International and local governments require constant attention. If you have any questions about your business situation, please do not hesitate to contact us. Although XBRL may or may not be mandatory for your company, being well-prepared creates more certainty in the long term. A good start is half the work, which we are happy to help you with.
Header image by Mikael Bomkvist
Every year organizations, accountants and regulators keep up to date with local and international rules and laws regarding accounting and finance. In recent years, digitalization is rapidly growing, including electronic formats and reports. Therefore more European countries start to apply the European Single Electronic Format (ESEF). While the world of financial services moves towards international standards and formats instead of localized ones, each country does this at its own pace. What can we expect from ESEF, and why is it convenient to use this electronic reporting format to prepare annual financial reports?
ESEF is assigned by the European Securities and Markets Authority (ESMA), an independent EU Authority. ESMA has one mission in mind: enhancing investor protection and promoting stable and orderly financial markets. Therefore, this EU Authority safeguards the stability of the EU’s financial system. This safeguarding includes the protection of investors while promoting stable and orderly financial markets. They mainly assess risks to investors and markets, contribute to a rulebook for EU financial markets, and promote supervisory convergence and directly supervising specific financial entities.
ESMA wishes to make reporting easier for issuers and facilitate accessibility, analysis and comparability of annual financial reports. The digitalization of annual financial statements in the EU is nothing new; in 2013, the Transparency Directive amended a requirement for electronic reporting formats. Only recently, ESEF became mandatory, with the following criteria:
- Issuers must prepare annual financial reports in XHMTL;
- Annual financial reports that contain IFRS consolidated financial statements must be labeled with XBRL ‘tags’;
- The XBRL ‘tags’ must be embedded in the XHTML documents with Inline XBRL technology;
- The taxonomy must provide the hierarchical structure used to classify financial information. This classification is essential for structured electronic reporting using XBRL as an extension of the IFRS taxonomy
- Mark-up disclosures using the taxonomy element must have the closest accounting meaning to the marked up disclosure;
- Primary financial statements must be marked up in detail, with the application of mark-ups for the whole sections of the Notes, otherwise called block tagging.
ESEF is more than just the digitalization of financial reports. To ensure your company publishes the annual financial statements correctly, constant attention to detail is in order. While ESEF is mandatory in the EU, the XBRL-format is still in the application process. Even with one format and one accounting standard, per country rules and annual reporting laws may differ. We at Global Connect Admin BV make sure we stay up-to-date with local changes, so if you have any questions, or wish assistance regarding ESEF, fiscal reporting and cross-border transactions, feel free to contact us anytime. We would love to help out.