The new financial-reporting format es with some downsides but allows panies to gain efficiency by escaping the need to report in two separate formats.

munication is the key to merce.If a business wants to sueed in the global enomy it needs to municate in a mon language.The ability to translate from French,German,Japanese,Spanish,etc.to English (as the mon language),and back again,drives the munication supply chain of information.

The same rule applies to the digital languages used to transmit financial information from public panies to stakeholders.Aordingly,since 2009,the U.S.Securities and Exchange mission has required public panies to prepare reports in two different formats to serve the needs of two different audiences:humans (HTML)and puters (XBRL).

Where HTML puts financial information into a reporting format that can easily be read by humans over the web,XBRL puts it into a structured electronic interactive data format that can be fed into reporting and analytics software,allowing regulators and investors to quickly extract interactive and actionable insight from financial reporting disclosures.

The downside for filers reporting in two different formats?Duplicative,time-nsuming,and stly processes,and the potential for error when translating or paring one reporting format to another.

But technology has provided a solution.Since June 2016,the SEC has allowed filers to voluntarily switch from the two-format requirement to the more efficient,single-document Inline XBRL (iXBRL).In this format,XBRL metadata —financial aounting ncepts,aounting debits and credits,native values,value scaling,etc.—is embedded directly into a traditional HTML document.

iXBRL financial reports have the visual appeal and easy readability of traditional financial statements,but also ntain rich,embedded XBRL data that can be easily extracted and fed into an analytics environment.

The SEC’s current order gives public panies permission to use the iXBRL format through March 2020.During that period during investors and panies can evaluate the technology’s usefulness and the further development of new iXBRL preparation and analysis tools.The SEC most likely will promulgate a ruling prior to March 2020that will mandate the filing of iXBRL financials for public panies.

As panies evaluate whether to bee iXBRL early adopters,they need to nsider both the key benefits and the associated challenges.

Challenges and Risks of iXBRL

iXBRL represents change in technology,formatting,and use,bringing potential challenges and risks that uld impact panies’ability to file timely and aurate disclosures with the SEC and provide market participants with reliable,actionable data.These challenges include:

•Lack of independent audit assurance.The SEC’s 2009“Interactive Data to Improve Financial Reporting”rule,which mandated XBRL use for public-pany financial disclosures,was written to distinguish between the HTML and XBRL filing requirements and the related responsibilities of public panies and independent auditors.As such,there is no independent auditor assurance requirement from the SEC erning public panies’filed XBRL or iXBRL data.This sets up the potential for nflicting expectations between panies and investors,who may assume XBRL/iXBRL data has been independently audited.

•Adequacy of procres &ntrols.Given the growing reliance of public panies on disclosure-management applications,tools,and vendors to manage the creation of iXBRL/XBRL documents,management needs nfidence that the right procres and ntrols are in place to establish the auracy of these.Reviews should focus particularly on data security,user aess,and ntrols over the auracy and pleteness of information generated by disclosure-management tools.pany internal auditors should also have an understanding of the SEC filing process and the tools and technologies utilized in order to establish that risks have been identified and addressed.This uld include obtaining and reviewing SOC 1reports from third-party vendors providing disclosure-management solutions.

•Need for expanded cation,oversight,and reviews.Since disclosure-management applications automatically bee key ntributors to the creation of a pany’s financial statements,management should nsider any potential impacts to their internal ntrols over financial anizations may choose to undertake cational initiatives to help pany managers better understand the implications and risks.To help address those risks,they also may set up a process for appropriate oversight,reviews,and approvals by the CFO,investor relations mittee,and legal unsel.

How panies Can Benefit from iXBRL

By opening the door to voluntary iXBRL adoption by public panies,the SEC is further aelerating the shift from traditional filing to a more modern,information-rich format that promotes greater transparency,helps market participants use financial information more efficiently,and helps the SEC fulfill its oversight and enforcement mandate.

iXBRL offers numerous specific benefits,for both public panies and users of public-pany financial information.By putting this information into a single unified document,iXBRL can help panies streamline their reporting processes,decrease preparation sts,eliminate the risk of errors,and improve the quality of structured data.

Additionally,iXBRL simplifies the process of displaying public pany information through SEC viewers,disclosure management applications,public disclosures,and other market tools.

As public panies assess their own adoption of the format,they need to understand the risks and ensure that plications do not impact their ability to municate their financial truth on an aurate and timely basis.

 中文新闻:iXBRL——风险与机会同在