What is iXBRL?
iXBRL, or Inline Extensible Business Reporting Language, is a data format that combines the benefits of both human-readable and machine-readable data (as compared to XBRL which can only be interpreted by machines). It is a digital language that enables financial data to be presented in a standardized format that can be easily accessed, analysed, and compared by different stakeholders.
iXBRL offers numerous benefits, including improved accuracy and transparency of financial data, reduced errors and inconsistencies, and increased efficiency in financial reporting. It also enables companies to comply with regulatory requirements, such as those set by the Companies Act of South Africa.
Why iXBRL Conversion is a Must for Qualifying South African Companies?
From 1 July 2018, all qualifying entities in South Africa are required to submit their financial statements in iXBRL format to CIPC. The objectives are to reduce the administrative burden on businesses when they report financial information to the government and to achieve regulatory compliance to accomplish the mission of the government agency.
The iXBRL conversion process involves tagging each item in the financial statements with a standardized code, making it easier for CIPC to extract the relevant data and perform automated checks. This will not only speed up the annual filing process but also reduce the risk of errors and inconsistencies in financial reporting.
Which companies qualify to submit iXBRL converted financials?
All companies that are required by the Companies Act 71 of 2008 to produce “Audited” financial statements should submit their financial statements in iXBRL format to CIPC.
Companies that voluntarily audit their financial statements based on shareholders’ resolutions or board decisions, and those that have their financial statements independently reviewed, are not obliged to submit their financial statements in iXBRL format, but they may do so if they wish.
In conclusion, iXBRL conversion is a must for qualifying South African companies as a requirement set by the Companies and Intellectual Property Commission (CIPC) and applies to all companies that are required to produce "Audited" financial statements in compliance with the Companies Act of South Africa. While the initial implementation may require some adjustments for companies, the benefits of iXBRL conversion will ultimately streamline financial reporting and ensure regulatory compliance. Therefore, it is important for companies to ensure that their financial statements are accurately and efficiently presented in the required format.
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