Before, companies used a different format for their business financial reporting. Computer software programs weren’t able to accommodate different formats until the XBRL format came into the picture 26 years ago. Singapore adapted the format for filing requirements about 17 years ago. According to Singaporean law, companies in the country, either with unlimited or limited shares, should file their FS (Financial Statements) in simplified XBRL formats. The uploaded data to ACRA (Accounting Corporate Regulatory Authority) in the uniform format will be easy to manipulate. Plus, it helps authorities to better plan, budget, and forecast better. Not to mention, financial experts, government agencies, and institutes mine and analyze so as to find trends in the country’s economy.
What is XBRL?
According to experts at BoardRoom, XBRL involves applying computer-readable tags to data in a business. It enables users to automatically process data using software, providing a great opportunity to analyze business data and bringing more gains. Financial statements of a company, which are converted into the format might appear unchanged to human readers but may have tags that software can use and access. It will provide identifying tags for every individual item. For instance, ‘operating profits’ have different tags when compared to ‘current assets.’
What is the Importance of XBRL?
XBRL formats provide invaluable benefits. This language enables business organizations to compile financial statements, which comply with the current accounting standard of the country. Associated tags for every reported fact will make financial statements compile with Singapore’s specific standards and allow users to understand the meaning behind every piece of data in the report. In turn, this will enable investors as well as regulators to verify the dependability and accuracy of the data provided. Simplified XBRL reports benefit entrepreneurs to a great extent. Business owners will gain insights into the performance of their business, thanks to the details that XBLR provides. In addition, compliance with the rules as well as regulations that surround businesses is achieved through this kind of insight, which helps to avoid penalties and fines. Another advantage of using XBRL report is that it guarantees companies efficiency. Eliminating the importance of manually entering and aggregating into reports enables XBLR to help businesses save both money and time. Not to mention, the language facilitates easy data accessibility in currencies and multiple languages – meaning global companies may access reports across international boundaries.
Singapore Filing Requirements
The ACRA implements as well as enforces requirements for filing XBRL in the country. Companies that run in the country should adhere to those financial filing resources. Some of these requirements include the following:
- Companies should file financial statements before the due date using existing filing requirements and data elements.
- Businesses must use revised data components as well as filing requirements.
Who Are Exempted for Filing Requirements
Exemptions of filling XBRL aims at alleviating the burden and stress for some businesses, like insolvent EPCs (Exempt Private Companies) and dormant companies. In order to qualify for this exemption, companies should meet the conditions, which are specified in Section 201A of the Companies Act. They must also meet certain criteria for being dormant companies – meaning they should prove that they don’t generate income anymore or aren’t involved in any active trading activities. Note that, not every company qualifies for this exemption. Directors must ensure their companies meet those exemption criteria so as to avoid penalties for not complying with the XBRL format.
Accounting Standards and Taxonomy That the Country Adopts
In Singapore, the ACRA’s taxonomy is established depending on the disclosure requirements for every financial statement that comes from the following:
- Singapore Exchange Listing Manual
- Singapore Companies Act
- SFRS (Singapore Financial Reporting Standards)
Usually, the authority’s taxonomy is closed and not extensible. This means it doesn’t let preparers define or add their company’s specific concepts and create their relationship with different concepts.
Guidelines and Deadline
Under the Singaporean’s authority, every company should abide by some filing guidelines and deadlines. It sets out some international standards for financial reports that use XBRL taxonomy. In order to make the entire process easier, ACRA has created BizFinx. This is a multi-upload tool that lets companies submit reports in an efficient and easy manner. Filing deadlines, which companies must be aware of depends on different kinds of business entities. This deadline corresponds to the annual return filing deadline for companies. Every company must meet those deadlines because failure to do so can lead to penalties, like fines and other ACRA sanctions. In addition, you should note that every change, which is made outside the timeline that the authority specified won’t be reflected in the company’s filing records until they approve them. This is why it is important for companies to make sure they take the right steps so they can adhere to the set regulations and timeline when submitting filings via Bizfinx.
Validation Rules of XBRL
Among the key roles of XBRL reporting programs is to collect quality data for further consumption and data analysis. Automated validation rules play an important role in ensuring XBRL reports are quality. Validation rules backed by requirements from any underlying business domain are called business validation rules. A perfect example includes ensuring that important facts are all reported. It may also include ensuring negative rules aren’t reported for concepts, which only have positive and good values.
Creating XBRL Instance Documents
Business organizations have the option of creating their documents in-house or outsourcing the services to a third-party company to help them convert their statements into XBLR formats. One of the first steps of creating instant documents involves tagging the language’s taxonomy components with different accounting heads in the company. This, in turn, creates a mapping of taxonomy components with accounting heads to ensure accounting details are converted into XBRL formats. Choosing the right components for financial statements will require you to be a good judge of elements.
The bottom line is that XBRL filing has completely changed financial reporting in the country, improving efficiency, accessibility, and transparency. Business organizations subject to filing requirements should diligently submit and prepare their statements in the XBRL formats by the specified deadline. Adhering to those requirements doesn’t just ensure regulatory compliance. It also helps to facilitate better decision-making and data analysis.
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