iXBRL The Future of Reporting
What was it?
The benefits of structured data for corporate reporting have been talked about for over a decade. However after years of uncertainty things are finally becoming clearer. With the European Single Electronic Format (ESEF) due to come into effect on 1st January 2020 and therefore effect reports for year ends of 31st December 2021 onwards, this is rapidly rising up the reporting agenda.
We hosted a workshop with Thomas Toomse-Smith, Project Director at the Financial Reporting Lab, who updated us on the latest developments while our Chief Technology Officer Mirko Savarese demonstrated our practical approach to ESEF reporting.
Why is this important?
While communication in many forms has increasingly become digital, this hasn’t been the case for investors who still have to sift through vast amounts of data. It’s likely the new iXBRL formatted filings will create a large pool of structured financial data that gives contextual information to the figures.
While this can be seen as a regulatory requirement, we see it as an opportunity for companies to think strategically and innovate with how they present information online. It provides an opportunity to effectively communicate the value companies create to investors and other stakeholders, potentially using video and engaging web content on top of the annual report.
Key takeaways from the discussion
- ESEF does not replace the role of the annual report as a communications opportunity. The iXBRL document does replace the PDF document for filing purposes, but should not replace the online annual report.
- There are different levels of design that you can take into account by incorporating viewer technology. This isn’t a requirement and is dependent on cost, time and the comfort level of the Board for a document that shareholders, investors and wider stakeholders will read.
- The iXBRL document should be audited but no standard has yet been identified. The investor community want assurance over this, but there is complexity over this and hasn’t progressed very far at this stage.
- Company Secretaries should have this on their Board’s agenda as they will ultimately sign off on the document. While ESEF requirements do not apply until next year, companies are undertaking a dry run of the process this year to ensure they familiarise the company with the process.
We understand that the iXBRL solution will ultimately vary by client. Our technology solution, combined with our experience of regulatory best practice provides an effective solution that saves time, cost and ensures greater accuracy for clients.
If you want to talk about how we can help your organisation best apply the new reporting requirements, please get in touch with Amanda Alexander at AAlexander@blacksunplc.com