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.