The ease of doing business and particularly reducing the regulatory burden for businesses received a boost with the launch of the Companies and Intellectual Property Commission’s (CIPC’s) Extensible Business Reporting Language (XBRL) this week.
XBRL is a digital financial reporting solution that allows companies to file yearly financial statements that can then be shared across the regulatory spectrum for multiple purposes.
Speaking at the launch of the XBRL, Trade and Industry Minister Dr Rob Davies said that while there are many challenges with the Fourth Industrial Revolution, it does offer potential to improve governance.
Davies stated that this was already evident in the work done by the CIPC to apply digital technologies to company registrations.
“The digital financial reporting is introduced via the internationally acknowledged best-practice technology standard. XBRL is for electronic communication of business information . . . it simplifies the preparation and analysis of data, providing major benefits in the communication of annual financial statements, and a step towards absolute connectivity between all our entities,” he noted.
According to Davies, the XBRL will align the submission of yearly financial statements with that of the global reporting standards for businesses. The programme will also mitigate the administrative burden on businesses when reporting financial information to government for regulatory compliance.
“This system has the capacity to ensure that there is integrity in the financial reporting mechanism to different agencies in government.”
“Further, it supports greater transparency, improves the efficiency of capital markets by assisting analysts, financial and security regulators, business registrars, tax authorities and other users to access relevant facts,” said Davies.
CIPC Advocate Rory Voller commented that XBRL will assist companies with filing their yearly financial statements to egress from a pdf reporting format, to a structured format.
“By using XBRL, companies and other producers of financial data and business reports can automate the processes of data collection. This will, ultimately, reduce the burden of multiple submissions to different regulators. We are satisfied with the results and believe the system offers users long-term benefits, especially if they integrate it with their back-end systems,” he said.
He added that a six-week pilot programme was conducted, during which more than 100 listed and unlisted entities were invited to test the system.
XBRL reporting applies to about 100 000 qualifying entities in South Africa.
South Africa is one of the first countries in Africa to introduce this financial and regulatory reporting technology.
The filing of financial statements to the CIPC in XBRL format with the yearly returns becomes mandatory from July 1 for companies meeting the audit threshold.