by Lum Ying Mei

 xbrl_tagging

How Does XBRL Work?
XBRL works by adding “data about the data”, through the use of “descriptive data” (tags). XBRL enables unique identifying tags to be applied to each individual piece of business and financial data, providing information about the data, in order to allow computers
to communicate with one another without any human intervention. XBRL makes static data “interactive” and “intelligent”. Each piece of business information -be it financial, qualitative, quantitative or abstract – has detailed descriptive and contextual information wrapped around it, so that the data becomes machine-readable and available for analysis, storing, exchange with other computers and presentation to a variety of users even when used in other XBRL platforms.

prep_for_xbrl

(Source: Accountant Today)

Who uses XBRL? 

Since 2009, more than 30 regulators across the globe, including the US Securities & Exchange Commission (SEC), have mandated XBRL as the required electronic reporting format for the filing of financial statements.

eXtensible Business Reporting Language (XBRL) is a new search-facilitating technology which enables the electronic transmission of business and financial data, reducing informational information asymmetry and barriers that exist through non-standard taxanomies and PDF submissions.

XBRL in Malaysia 

In Malaysia, SSM has planned a phased approach in implementing the XBRL format of reporting for financial statements to all companies. Companies can voluntarily implement in 2014/2015 whilst the mandatory participation is yet to be confirmed.

xbrl requirements malaysia

(Source: SSM Regional Conference 2013 slides)

In coming up with the XBRL Taxanomy, SSM considered the requirements of MFRS, PERS, the Companies Act 1965 and the New Bill. According to an article in Accountant’s Today (pg34, Sept/Oct 2012 issue), SSM also promotes the adoption of XBRL as a nationwide format to be used by key agencies such as the Inland Revenue Board (LHDN), Securities Commission (SC) and Bursa Malaysia and the building of extension taxonomies by the mentioned agencies. The said adoption will provide SSM, other regulators and businesses with detailed data which can be aggregated and made available to stakeholders in the form of industry analysis for industrial benchmarking.

Users of data which is received electronically in XBRL can automate its handling, cutting out time-consuming and costly collation and re-entry of information.  Software can also immediately validate the data, highlighting errors and gaps which can immediately be addressed.  It can also help in analysing, selecting, and processing the data for re-use.  Human effort can switch to higher, more value-added aspects of analysis, review, reporting and decision-making.

xbrl_taxanomy_elements

(Source: SSM Regional Conference 2013 slides)

The implementation of XBRL in Malaysia started in 2010 and looks like it will impact most companies significantly very soon. Here’s a brief look at what has been done and what is to come:

Preparation
2010 SSM’s XBRL Steering Committee meeting established (chaired by Malaysian Accounting Standard Board).Benchmarking study carried out on the following jurisdictions:i. Companies House (UK);ii. National Bank of Belgium(Belgium);iii. Logius (Netherlands); andiv. ACRA (Singapore).
2011 Prepared and tabled the White Paper on the proposed SSM’s implementation plan
2012 Development of XBRL Taxanomy for Malaysia
2013 SSM XBRL Taxonomy (SSMT)Elements 2012; Exposure Draft 2 (ED2) released for public comments. Engagement sessions conducted with stakeholders.
Implementation
2014 Voluntary Approach
201? Mandatory Approach – financial reporting using XBRL TaxanomyPHASE 1: listed and non-listed public companies (including subsidiaries) using International Financial Reporting Standards (IFRS) or Malaysian Financial Reporting Standards (MFRS);PHASE 2: private limited companies using Private Entity Reporting Standards (PERS).
201? Mandatory Approach – non-financial reporting (as required under the Companies Act 1965) using XBRL Taxanomy

XBRL Success stories 

Although Malaysia is in the preliminary stage of adoption, XBRL has been successfully adopted in many jurisdictions with excellent results. Real-life examples from other jurisdictions indicate that benefits include reduced costs of gathering financial or nonfinancial information, enhanced decision-making processes and integrity of source data, and better coordination between various regulatory bodies:

xbrl1 xbrl2

(Source: Accountant Today)

What next?

In summary, companies will need to decide on one of the following courses of action once the mandatory date for implementation is set.

xbrl-options

(Source: SSM Regional Conference 2013 slides)


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