Financial regulators from the United States and Europe often have differences when trying to converge and establish common standards. But fortunately, they seem to have settled on the same format for digital financial reporting – and that standard format is Inline XBRL.
The importance of Inline XBRL for digital financial reporting has become evident in the past few years. In December 2016 the European Securities and Markets Authority declared that starting in 2020, Inline XBRL will be the single electronic format used by EU listed companies to submit their consolidated IFRS financial reports. And similarly, in March 2017 the U.S. Securities and Exchange Commission (SEC) began allowing financial statement submissions using the Inline XBRL format and proposed a rule for its mandatory adoption.
What is Inline XBRL?
Inline XBRL is a format in which the document (the financial statements) contains not only the HTML format of the financials (the traditional human-readable format that is pleasing to the eye), but also contains the computer-readable XBRL tagged data. The HTML financials and the XBRL financials are providing the same information, so it makes sense that they be combined into one document. This allows the financials to be read by either a machine or a human – consumers get to choose whichever method they deem appropriate. As I have said before, Inline XBRL allows you to have your XBRL and read it too.
Increasing importance of Inline XBRL
Increasingly, any discussion of digital financial reporting eventually turns to the topic of Inline XBRL. I recently attended the XBRL Europe Conference at which Inline XBRL was a topic of discussion. Conversation centered around technical requirements and ironing-out specific issues so that this format will properly deliver its intended benefits.
Many other venues have put Inline XBRL at the forefront. The Financial Reporting Council’s Financial Reporting Lab recently released “XBRL: Deep-dive, Digital Future of Corporate Reporting”. The report provides a view of XBRL and Inline XBRL in the context of using technology in corporate reporting. XBRL US and its Data Quality Committee frequently discuss and monitor the activity of inline XBRL at the SEC. And the United Kingdom’s implementation of Inline XBRL continues to be the financial reporting standard for financial submissions to Her Majesty’s Revenue and Customs. It was the first Inline XBRL requirement and has been going strong for several years.
Continuation of Inline XBRL
It’s refreshing to see the EU and U.S. agree so clearly on inline XBRL as the future format for digital financial reporting. It’s likely there will be additional implementations of Inline XBRL by regulators in other jurisdictions. I encourage the continuation of Inline XBRL. It will increase the efficiency of consuming financial data across the EU and the U.S. and across the borders of those countries that make it their standard for digital financial reporting.