XBRL, the business reporting standard, is no longer a new name in the world of digital reporting. Many regulators and entities across the globe have embraced XBRL in one form or the other. The first step is usually taken by the regulator who comes up with the roadmap to implement XBRL for better and faster reporting. It starts with developing a taxonomy, setting the filing platform, and then developing applications to consume the XBRL data collected, often along with the Business Intelligence (BI) reports.
With our significant experience in implementing XBRL projects globally and a ringside view of related reporting trends, we have come up with a set of pointers for those looking to adopt XBRL as the reporting standard.
1. Have clearly defined business requirements
For any project that we undertake, including XBRL programs, we ensure that the business requirements are clearly defined and accepted by all the stakeholders beforehand. XBRL offers numerous options, be it for designing a taxonomy, or methods to use and work with the XBRL data. Each option has its pros and cons and is best suited to certain scenarios. Therefore, it becomes imperative to lay down all the business requirements before introducing XBRL in the supply chain.
2. Identify the priorities of your XBRL project
After defining requirements, the next big step is to set the priorities for the implementation program. What are the key goals for the XBRL Implementation? – Is it to get accurate data or more granular data, or the ability to compare data spread across industries/sectors, etc, or to get market acceptance? These priorities help to decide the implementation roadmap – levels of taxonomy details, the scope of filing, provisions to assist filers by providing a free tool or an incentive, etc.
3. Involve the stakeholders
Having buy-in from all stakeholders or at least informing the stakeholders well in advance leads to higher acceptance and a smoother rollout of the XBRL program. Getting stakeholders involved right from the initial stages of implementation helps to capture their inputs and feedback earlier. This can avoid rework while preempting issues and challenges which could otherwise hurt the implementation.
4. Get the taxonomy right
One of the most integral parts of any XBRL program is the taxonomy. It is the taxonomy that reflects the data disclosure requirements, the validation rules, and the rendering formats. XBRL specifications are vast and offer a bunch of alternatives that the taxonomy authors can choose from. The taxonomy design has an impact on all the other stages of implementation and hence it is important to create the appropriate taxonomy taking all the requirements into account.
To know more about the Taxonomy Development process, read our blog on Building an XBRL Taxonomy. Help is at Hand
5. Design a roll-out strategy considering the market maturity
Though XBRL is not new, the levels of adoption across the globe could be different. For some regulators, it could be the first XBRL implementation while others may be considering an upgrade in their existing XBRL systems. Accordingly, the readiness of the market, and availability of XBRL expertise, and applications could be different. These factors need to be considered while setting the contours of any XBRL mandate. Starting small could work well for first-time implementations while providing applications for consuming XBRL data that could be found in matured markets.
6. Remain in touch with XBRL International Inc.
And lastly, it pays to stay in touch with XBRL International Inc. (XII). The XII through its boards and working groups propagate and guides XBRL Implementations across the globe. The task forces of XII Best Practice Board i.e. Taxonomy Architecture Guidance Task Force (TAGTF) and Implementation Guidance Task Force (IGTF) has been set up to guide in these areas.
The upcoming XBRL International Conference in Copenhagen to be held from September 8-10, 2015 is all set to have workshops dedicated to XBRL implementations. One of the key topics to be discussed at the Conference will be XBRL implementations across the world and how XII can be of help.
What is the future of Standardization in Business Reporting(SBR)? Read our blog on “To SBR or not to SBR, that is the question”