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Introduction
Many accounting and business professionals are aware of the fact that there has been much debate about global efforts to simplify and standardise financial reporting, as well as improving efficiencies in the preparation and communication of such information. The drive in many countries (including South Africa) to comply with International Financial Reporting Standards (IFRS), as well as the convergence between IFRS and US GAAP illustrates this point.
Many accounting and consulting firms have jumped on the bandwagon to help organisations meet their IFRS requirements in time. Each of these firms has its own methodology to get its clients IFRS compliant. In all this IFRS conversion madness, there is an alternative method that can help organisations not only to prepare IFRS compliant financial reports, but also to embrace the digital age. This alternative method is also compatible with, and can enhance, many consulting firms' 'unique' IFRS transition methodology.
This method is Extensible Business Reporting Language (XBRL). XBRL is the product of a consortium of national accounting bodies, software vendors and companies, which joined forces in the development of a global digital financial reporting language. XBRL is based on the Extensible Markup Language (XML) platform and is an electronic format or language with the aim of streamlining and simplifying the flow, preparation and analysis of financial reports and accounting data.
The XBRL Solution
Background
XBRL is a universal information format that offers tremendous opportunities for organisations in terms of cost reductions, efficiency gains and data analysis. It can be used to radically reduce the time and costs associated with data capture and analysis within key business processes, and to streamline business-reporting processes. XBRL also allows disparate information systems to communicate seamlessly with each other over the Internet. This is something many organisations have aimed at for a long time, and with the advent of XBRL they are finally able to achieve it.
Global XBRL developments
As the world economies are growing more and more intertwined, it is of the utmost importance for any global player to be knowledgeable of major developments in the financial and business reporting environment. It is therefore crucial for South African CFO's and finance decision-makers to be aware of what is happening in the XBRL arena. Some of these recent developments are...