PUBLISHED ON - 17.11.2023.

Demystifying XBRL: Reporting made easy

XBRL, short for eXtensible Business Reporting Language, has reshaped how we handle financial reporting. It is a powerful and flexible version of XML, defined to meet the specific requirements of business and financial information.

It lets you apply unique tags to different financial items, making it easy to provide extra information about each item, such as whether it's a monetary item, a percentage, or a fraction. This helps show how information is related to each other. XBRL allows the representation of entire financial statements and inter-related disclosures. In order to do so, the specification that create the standard are relatively complex.

We have already written about how XBRL improves your financial reporting. However, understanding XBRL is one thing; implementing it seamlessly in your reports is another. In this article, we'll break it down and show you the easiest ways to do it.

Two important aspects of XBRL

XBRL makes data readable with the help of two documents – Taxonomy and XBRL instance document.

Taxonomy defines the elements and their relationships based on the regulatory requirements. Using the taxonomy prescribed by regulators, issuers need to map their reports, and generate a valid XBRL instance document. The process of mapping means matching the concepts as reported by the issuer to the corresponding element in the taxonomy.

While the Taxonomy document defines reporting concepts, the XBRL instance document contains actual values of facts based on defined concepts. Besides the actual value of a fact, the XBRL instance provides contextual information necessary to interpret fact values. It is inherently subject to the rules of the XML specification and the XBRL instance schema. It can also be assigned any number of additional extended taxonomy documents for validation.

XBRL instance documents contain the general business reporting information, based on the concepts defined in the associated taxonomies:

• Business facts or measurements, abstract elements expressed as items and/or Tuples
• Contexts, containing information about the entity being described
• Units, which specify the simple or complex numeric terms by which an item has been measured (e.g., EUR)
• Footnotes, used to express irregular associations between elements

How to simplify XBRL reporting

Creating XBRL instance documents can be tedious and error-prone if done manually. Consequently, the benefits of XBRL cannot be delivered without software tools. So, to simplify XBRL reporting:

• Invest in training: Ensure that everyone involved in XBRL reporting receives proper training in XBRL concepts, accounting standards, and relevant software tools.
• Seek expertise: Consider consulting with experts or professionals who specialize in XBRL reporting to guide you through the process and help with compliance.
• Use XBRL software: Choose a dedicated XBRL software that can simplify tagging, validation, and submission processes.
• Start Early: Begin the XBRL reporting process well in advance of submission deadlines to allow time for review and corrections.

To help you master the technicalities of XBRL, we've developed a solution called XBRL Point. It is a plug-and-play software that converts your data into XBRL documents. To simplify the process of preparing XBRL instance documents, we have developed several functionalities:

• Easy integration of source data – XBRL Point supports data import from many different formats, such as Excel, PDF, Word, etc. You can easily upload these files and convert them to the required format.
• Creating projects – In XBRL Point, a project represents the central place for defining your company information and report settings, which will apply to all tagged facts.
• Smart tagging – You can tag the data fast and easy using drag & drop, or the AI-powered automatic tagging feature.
• Validating reports – Calculations are validated before the instance is created, which gives a second layer of validations.
• Validating documents – You can validate XBRL instance documents with all the criteria and review the user-friendly report for resolving errors.
• Easy preview – You can revise XBRL documents in an interactive preview, with marked XBRL tags and corresponding fact properties.
• Simple instance generation – Once the tagging is completed and validated, you can generate the XBRL instance file with a click of a button.

You can see all these features in action by scheduling a demo of XBRL Point here or as for a free Consulting session with one of our experts.