iXBRL - What you need to know

iXBRL (inline eXtensible Business Reporting Language) is essentially mark-up language that sits behind accounts, similar to HTML code sitting behind emails. It is a way of ‘tagging’ financial data so it can be automatically processed by software systems. The tags are typically created when a company’s accounts are prepared – accounts in traditional paper format are prepared as normal but the electronic version of these accounts will also contain additional data in the form of tags. These tags tell compatible systems how pieces of information should be displayed, and also what it is and how it relates to other information in the accounts. iXBRL creates documents in a standard format that can be read by people and analysed by computer software. Having financial data in a computer-readable format will increase the efficiency and accuracy of information processing by government agencies.
 
Since September 2010 the Revenue Commissioners in Ireland have supported the electronic filing of returns in XBRL (which is essentially iXBRL without the human readable element). Living in as we do in the age of e-government, the move from optional filing to mandatory filing is a natural step.
 
Once iXBRL is widely adopted throughout the European Community, it will facilitate a reduction in the regulatory reporting burden currently endured by business. The Revenue Commissioners will benefit from this, by being able to perform statistical analysis on the companies’ figures, and this will help them target their enquiries as well as allowing the Government to be better informed in setting tax policies of the future. For many businesses this will be a significant change which will affect both tax and finance functions. Companies will need to ensure that they have the necessary software and expertise in place to cope with the new requirements. Generally speaking, only large organisations who prepare statutory accounts and tax returns in-house will be impacted internally when these changes happen. The impact will in the main be dealt with by professionals like ourselves who will ensure that they deliver compliance in the iXBRL format on behalf of clients.
 
In the UK the HMRC already require all companies and organisations to file UK Corporation Tax filings from 31 March 2011 online and with iXBRL.  
 
Latest reports from the Revenue in Ireland are that corporate tax returns will be required to be accompanied by iXBRL compliant accounts by sometime in 2013, but no official announcement has yet been made. We will keep you informed on this issue.
 
For more information, please get in touch with the tax team at 01 496 5388 or e-mail tax@bakertillyrg.ie

Kind regards,

Aidan Byrne,
Tax Partner