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What is XBRL? And what's in it for regulated entities?

Often termed “bar codes for reporting”, eXtensible Business Reporting Language (XBRL) is an international business reporting standard adopted by many regulators, companies, and other agencies across the world for standardising and simplifying collection, and exchange of information between organisations. XBRL is an open standard and is in use in more than 50 countries.

XBRL simplifies and standardises reporting across multiple stakeholders e.g. businesses to government agencies, business to business etc.

Adoption of XBRL is rapidly replacing the use of paper based, PDF or complex report-based data submissions and exchanges in many industries with a standardised digital submission model that is independent of any software application or platform, making it useful for the transmission of business and financial information to multiple company stakeholders and regulators.

Some of the key features of XBRL:

Clear definitions: XBRL allows the creation of reporting taxonomies that are defined in a standardised manner and is reusable. Reporting taxonomies are developed by regulators for example in allowing regulated entities to understand the information that needs to be reported.

Testable Business Rules: XBRL allows incorporation of business rules that can be logical, mathematical or both. These rules can be applied at the point of submission of data or at the point of receiving making it usable for both data supplier (e.g. entities submitting a regulatory report) as well as the receiver (e.g. regulator receiving the report).

XBRL can also support automatic aggregation of data or creation of ratios or other value adding analytical outputs on the raw data being supplied.

What is a taxonomy?

A taxonomy is a language system used to clearly and accurately classify and define certain type of information. Taxonomies have been developed in business and finance to ensure consistency in how governments, regulators, businesses and other stakeholders use, and understand the meaning of, key words and phrases through the reporting value chain.

XBRL in Australian Regulatory Reporting Landscape

In Australia, the most important taxonomy used for regulatory reporting is the SBR AU Taxonomy, which is part of the Standard Business Reporting (SBR) initiative. The SBR initiative led by the Australian Government since 2010 is leveraging XBRL to create a standardised reporting definitions (SBR AU Taxonomy) & to enable data collection or exchange in this format leveraging the SBR AU Taxonomy.

The SBR AU Taxonomy is a collection of data elements that may be required to be reported by business to government agencies. These data elements are classified and defined in the SBR AU Taxonomy – like a dictionary. The agreed data elements and their associated definitions are used in the creation of machine-readable reports (in XBRL format) to be submitted by a business to agencies using SBR. The data elements are defined once and reused across multiple forms and multiple agencies. By reusing common data elements, businesses only need to understand and report to government on these data elements irrespective of the agencies requiring this information. Each SBR agency identifies and defines the data elements required for their reporting forms in scope. APRA being one of them. APRA incorporated SBR from 1 July 2011.

For APRA reporting, there are 2 types of taxonomies that are SBR-enabled.

  • Definitional Taxonomy refers to the dictionary of all terms and their agreed meanings.

  • Reporting Taxonomy refers to the combination of terms, concepts and dimensions needed to report specific information to APRA. The combination of terms, concepts and dimensions provide enough granularity in a structured manner for collection of specific financial or numerical data point (fact).

The SBR AU taxonomy is written using XBRL. Entities can use XBRL as an alternative method for submitting data to APRA in the form of an XBRL instance document.

APRA’s current data collection platform Direct to APRA (D2A) as well as future platform APRA Connect are SBR enabled meaning entities can submit their data using XBRL format on both these platforms.

The benefits for entities in using XBRL

Using XBRL for all regulatory reporting submissions essentially means being SBR Compliant for entities. Being SBR enabled can lead to:

  • tighter, more streamlined and cleaner regulatory and operations control frameworks

  • a reduction in manual interventions

  • "single" definition of reporting dimensions and concepts; de-duplication of reporting logic

  • consistency in definitions of reporting concepts and dimensions which are common across data collections

  • improved reconciliation and movement analysis

  • greater traceability, auditability & transparency

  • streamlined reporting processes, less data manipulation, less time needed to produce reports and

  • fewer re-submissions to the regulator. This is in addition to creating greater confidence in the regulatory reporting process.

Transition to XBRL should not be considered merely as an efficiency driver for regulatory reporting. XBRL enables greater quality of data for the organisation over time and when implemented effectively, can radically simplify overall regulatory reporting across multiple agencies and create alignment of reporting both internally and externally.

RegConnect supports submission of data in XBRL format.

How we can help you leverage this standard

If you would like to know more about XBRL or SBR and how you can transform your reporting using this standard, feel free to get in touch with one of our data and regulatory reporting experts for an obligation free conversation.

If you would like to use XBRL for APRA Reporting, contact us to know more about our frictionless APRA submission platform RegConnect or to book in a free demo tailored to your existing process. Check out our website to learn more about RegConnect or if you would like to register for one of our regular demo webinars.


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