iXBRL (Inline XBRL) is a filing format that combines the aesthetic advantages of a machine-readable XBRL instance document file with the aesthetic benefits of a human-readable HTML file.
As a result, a combined file containing both the conventional financial statements and the XBRL tagging information is submitted to a regulator and made public through the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) program.
The text of the standard HTML document is “in line” with the XBRL tags. In essence, iXBRL gives filers the ability to create financial reports that have the aesthetic appeal of a typical financial statement and all of the rich, machine-readable XBRL data hidden behind the text.
Who Is Required to Use IXbrl?
All US-GAAP and IFRS registrants must submit periodic and interim financial reporting using the Inline XBRL format starting on June 15, 2021, per the U.S. Securities and Exchange Commission (SEC). For the usage of iXBRL, the European Standards Market Authority (ESMA) of the E.U. is following its own European Single Electronic Format (ESEF) mandate, and regulatory organizations in many markets throughout the world are implementing comparable iXBRL regulations.
How Do IXbrl Function?
IXbrl(eXtensible HyperText Markup Language), which extends standard HTML by adding a layer of machine-readable metadata, makes iXBRL possible. The majority of modern web pages are created using xHTML, which separates the basic text, colors, and images that we view from the metadata that Google and other search engines use to immediately read, decipher, and rank the page.
To put XBRL tags “inline” (in the metadata layer) with the visible text, iXBRL uses XHTML. In the same document, iXBRL gives both human and machine readers the information they need, similar to a contemporary web page.
Anyone with a recent standard internet browser can examine publicly available iXBRL filings from within the EDGAR system thanks to the SEC’s inclusion of an iXBRL Viewer in the system. Human readers may simply navigate, search, and filter using the XBRL tags inherent in the document thanks to the iXBRL viewer.
What Are the Advantages of I Xbrl?
The key advantages of XBRL are built upon by iXBRL:
Making financial data machine readable: Financial data can now be consumed by data analytics tools much more easily thanks to XBRL. The financial numbers are effectively barcoded by XBRL tags, allowing computers and analytics tools to quickly ingest this data for comparison and analysis.
- Making financial information more accessible: People are increasingly using data analytics tools to digest and condense the insights they’re searching for and are no longer reading financial statements from cover to cover as frequently as they once did. Inline XBRL eventually makes financial information easier for anyone to consume and use, including investors, analysts, and others, by making it more machine-readable.
- Improving financial reporting consistency: iXBRL filings must adhere to either the US-GAAP taxonomy or the IFRS taxonomy. This thorough, standards-based tagging promotes consistency and allows for more accurate comparisons across and within organizations’ financial accounts.
- Giving businesses more control over how they tell their story: Traditionally, analysts and journalists have acted as the interpretive storytellers of businesses’ financial information, reading full-text statements and disseminating their analyses, comparisons, and other insights to the public. Using standard tags that allow the audience to directly interpret and compare financial information, iXBRL enables businesses to directly share their financial narrative with the public.
- Finally, iXBRL combines all of the advantages of XBRL with the speed and ease of producing and submitting a single document. Before Inline XBRL, filers first created their customary PDF or HTML document, and then they produced an independent XBRL document.
A Short History of I Xbrl
The Great Depression is essentially where the history of iXBRL begins. The Securities Exchange Act of 1934 was established by the SEC in response to the 1929 stock market disaster. The act aimed to increase openness and accountability by mandating that publicly traded corporations release specific financial data to the public. These days, the public may access all of that information digitally thanks to the EDGAR system.
A business reporting language called XBRL was developed in 1998. Since 2009, the SEC has required that all periodic and interim financial reporting be delivered in the XBRL format. The SEC began accepting voluntary XBRL submissions in 2005. Ten years later, in 2018, the SEC started gradually introducing the requirement that filings be made in iXBRL. All US-GAAP and IFRS filers must now submit their annual Form 10-K and quarterly Form 10-Qs in iXBRL format as of June 15, 2021.
The European Union and other international markets have started down a similar path toward requiring filing in iXBRL format.
What Is the Creation and Filing Procedure for I Xbrl?
It is now considered best practice in the US to complete your iXBRL tagging concurrently with the drafting or preparation of your financial statements. This is known as true in-line tagging, as opposed to post-drafting tagging. This applies to all quarterly 10-Q forms, the annual 10-K form, and any interim 8-K forms.
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How Are XBRL Tags Chosen?
For XBRL tagging, there are two primary standards or taxonomies. Domestic filers in the U.S. typically utilize the US-GAAP (Generally Accepted Accounting Principles) taxonomy, whereas foreign filers in the U.S., the E.U., and other markets with iXBRL requirements use the IFRS (International Financial Reporting Standards) taxonomy.
For the purpose of ensuring correctness and consistency in tagging, both taxonomies act as generally recognized guidelines that codify XBRL tagging principles.