Our recent story on the computing language XBRL claiming it could cost firms
‘tens of thousands’ has made me wonder why are the regulators forcefully pushing
this technology by making its use mandatory?
The rise of the new reporting language could offer businesses around the
world the chance to work on the same footing and simplify how financial
information is communicated through computers. Surely a good thing.
XBRL, or eXtensible business reporting language, is a form of electronic
tagging of certain words or information when making financial reports. It then
allows investors to use those tags to find and compare apples with apples.
Usually when it comes to technology it is either the software vendors or
users who are on board and trying to convince the other party that this is what
the industry needs.
With XBRL, however, software companies and users are united in their belief
that it is currently overcomplicated and expensive, with more time needed to
work out the detail.
Going through reports and adding the ‘tags’ can be a long and costly process.
One letter we received on the subject claimed that HMRC was not ‘listening to
plain common sense’ when it comes to XBRL. It seems the mandatory implementation
will force smaller practices to lose thousands of pounds which cannot be passed
on to clients because practices have to remain competitive in difficult times.
Would it not be better for HMRC to advise companies to shift to XBRL and
incentivise them to do so, similar to incentives for online tax filing?
XBRL users would have later deadlines for filing.
Although this will put added pressure on practices, it would give them a
reason to change.
Rachael Singh is a reporter on Accountancy Age
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