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How to Choose the Best XBRL Reporting Software?

Today, XBRL plays an important role in the generation and use of financial information.

As an XML-based standard, XBRL requires computer platforms, software applications, and accounting standards.

However, when it comes to selecting the best software from multiple options, you may get confused. Not anymore, choosing the right XBRL reporting software can be easier when you know the seven aspects below.

It’s important to highlight the best features of XBRL software so that you can look for these features while choosing an appropriate XBRL technology solution. Here are some essential features that can let you operate all the XBRL tasks easily.

#1 EASY INTEGRATION OF SOURCE DATA

As an organization, you can source data from a wide variety of enterprise applications. Now, the data sources you find vary in formats such as databases, spreadsheets, or XML files. Therefore, you should get a solution or software that easily integrates these data. Secondly, it needs to provide automatic sourcing of data and user-initiated sourcing of data.

#2 TAGGING OF INFORMATION

To master tagging, you need to have extensive knowledge of your business and information requirements. In XBRL, mapping files are used for the conversion and instance document generation process. The process requires further care as mapping determines the quality of the submitted data. If you rely on software instead of manual tagging, the software needs to provide an intelligent tagging feature.

#3 SMART SEARCH OF TAXONOMY ELEMENT

In tagging, the source data and taxonomy are deeply associated. There are approximately 5,030 elements in ESMA Taxonomy and more than 17,000 elements in US GAAP taxonomy. Hence, the process of finding the most appropriate XBRL element for tagging can be difficult for you. You can look for software that offers you an easy and context-based search facility.

There are other important features related to tagging such as mapping management, source document tagging, etc.

#4 COMPLEX DATA MANAGEMENT

In financial reports, both financial data and narratives remain present. Now, most of the information comes in a tabular manner or formatted content. It is done mostly for better presentation and analysis.

Therefore, your software should be capable of tagging the formatted content in the source document. Secondly, it should also maintain the same formatting in the instance document.

#5 XBRL TAXONOMY FEATURES

Taxonomy vision management is a vital aspect of XBRL reporting software. It should be capable of rolling the taxonomies forward from period to period. Customization of Taxonomy is another feature that your software should have.

Every company is exclusive and requires customization in XBRL services. The software should allow you to create and record a new element when a concept is not present in the taxonomy.

Taxonomy published by Regulator is subject to updates. Software should have the ability to quickly move from the older version to the newer version of the taxonomy.

#6 COMPREHENSIVE VALIDATION

The rules of XBRL are constantly changing and therefore, your software should come with comprehensive validation. It should be capable of providing an integrated process of validating all the criteria.

There should be validation at every stage of the process apart from a final validation. Also, it needs to provide a user-friendly report for resolving errors. Larger organizations often require a larger set of validation and business rules. For them, this feature is mandatory.

#7 INSTANCE PREVIEWER

Your XBRL software needs to have an easy instance previewer. This feature helps you to go through the report before creating an instance document or submitting it. As a result, you can get a feel of how the information tagged is looking in your instance document.

Now that you know the seven essential features of an XBRL reporting software, go ahead and get the most appropriate software for your business. If you are looking for a company to provide FERC XBRL software and other smart solutions at an affordable cost, you can feel free to get in touch with us.

We, Ez-XBRL, provide all the essential tools and technologies for creating accurate XBRL documents. We are recognized as one of the top companies providing XBRL consultation and solutions in the USA.

XBRL 2.1 specifications and complies with the XBRL conformance suite are supported by our services and products.

Our solutions are the most updated ones that comprise the features mentioned above. So, why wait anymore?

Call us today to learn more about our products and services.

According to the EU’s new Corporate Sustainability Reporting Directive (CSRD), the introduction of Inline XBRL in mandatory sustainability reporting is becoming increasingly vital. Investors, regulators, and stakeholders are placing greater emphasis on Environmental, Social, and Governance (ESG) issues, resulting in new demands for companies to provide ESG data with greater transparency.

What is the ESG Proposal all about?

The European Commission has approved a proposal to reform and replace the present Non-Financial Reporting Directive (NFRD) with a Corporate Sustainability Reporting Directive (CSRD). It will entail the use of Inline XBRL (or iXBRL) in reporting detailed and consistent structured data. This will usher in a new era of environmental, social, and governance (ESG) disclosure, providing far more useful and comparable information for investors and other stakeholders.

Why iXBRL?

XBRL is without a doubt the industry standard for digital financial reporting. Inline XBRL is the obvious choice for digital and transparent integrated reporting. The new CSRD reporting criteria must include ESG reporting as a core duty for them to join their financial counterparts in the EU’s ESEF framework.

Pillars of ESG

ESG stands for Environmental Social and Governance. These are the three important characteristics to consider when assessing an investment’s long-term viability and ethical impact –

Environment – includes energy use, waste management, and climate change.

Social – includes labor relations, human rights, diversity and inclusion, and product liability.

Governance – includes compliance, business ethics, controls, and procedures.

Management firms and investors can assess a range of criteria or specific concerns within each pillar to determine how a company performs.

How is ESG reporting affecting various areas?

Most investors prefer to remain committed to companies that consider ESG parameters and support resolutions on ESG issues, including climate change. ESG concerns are material to a company’s fundamental strategy and long-term value generation. Understanding how ESG helps drive a business’s purpose will help CFOs and other leaders better position their firms for a sustainable tomorrow.

Investors don’t just need reliable and comparable information; they need it in a machine-readable and easily consumable form.

What are the different ESG Frameworks?

ESG frameworks in use today to implement efficient reporting are as follows:

The Global Reporting Initiative (GRI)

GRI was the first and most widely used framework. Its accountability standards metrics include environment, human rights, governance, and social well-being.

This framework implements a holistic approach by working with stakeholders to determine how a company affects the world.

 United Nations Sustainable Development Goals (SDGs)

The SDGs, which were adopted by member states in 2015 as part of the larger 2030 Agenda for Sustainable Development, is a set of 17 goals aimed at creating a better future for people and the planet.

Although it is known worldwide, it lacks the sense of industry-specific indicators.

Morgan Stanley Capital International

Morgan Stanley specifically identifies ESG risk in the investment decisions taken by the firm. These ESG risks are determined through a scoring system covering data points and ratings ranging from CCC (laggard) to AAA (leader).

The Sustainability Accounting Standards Board (SASB)

The Sustainability Accounting Standards Board (SASB) brings together businesses and investors to discuss sustainability’s financial implications. SASB standards are industry-specific and are intended to help investors make informed decisions while also being cost-effective for businesses. They are created through an evidence-based and market-driven process.

SASB XBRL taxonomy is open for a 60-day trial period. (Find it here). This taxonomy encompasses SASB’s 77 industry Standards.

Challenges When Adopting ESG Frameworks

Some of the many hindering obstacles to meaningful reporting directly stem from the ESG framework themselves.

Different methodology and scoring systems –

 Various methodologies are used in ESG frameworks, resulting in different scoring systems and data interpretations. Scores can differ dramatically amongst frameworks, reducing the utility of the data. It’s difficult to choose the one that best fits the company out of all of them.

Lack of Coordination

There is a lack of harmonized standards within different ESG frameworks which complicates the task even more in terms of which reporting standards to choose.

In the recent chain of developments, the IFRS Foundation trustees released documents regarding sustainability reporting. The first, a Feedback Statement, summarises the major issues expressed by respondents to the Sustainability Reporting Consultation Paper. The second is an Exposure Draft, which details suggested targeted adjustments to the IFRS Foundation Constitution to allow for the establishment of an International Sustainability Standards Board (ISSB) to develop IFRS sustainability standards. The proposed revisions will be open for public discussion until July 29, 2021.

Additionally, the International Federation of Accountants (IFAC) has published a paper titled ‘Enhancing Corporate Reporting: Sustainability Building Blocks,’ which elaborates on the building blocks method and lends its support to it.

Conclusion –

Investors and acquirers are paying more attention to ESG rankings as evidence mounts those sustainable corporate practices are linked to success. ESG is here to stay. It may change names—it was previously known as corporate social responsibility—and it’s linked to an increase of interest in corporate purpose.

The regulation of electricity, natural gas, oil, and the entire hydropower industry in the US is governed by FERC or the Federal Energy Regulatory Commission. As the commission has launched a mandate for all these companies to submit their quarterly and annual accounts and operations information in XBRL format, the companies are leveraging the adoption of a new format to also evaluate existing processes, mitigate risk, and drive efficiencies and control within their FERC form filing processes

At first, the effort and investment for conversion may seem quite high, but it is supposed to reduce as filings progress over the years.

Non-compliance with this mandate will lead to higher penalties in the long run. By December 2021, the companies are expected to submit their first forms that include XBRL tagging, online to the commission.

Now, in order to be compliant with the FERC XBRL mandate, you as a company should have a clear idea of what process needs to be followed. To help you understand better, here we have compiled everything you need to know about the FERC XBRL mandate. All you need to do is initiate them early and stay updated with every detail of your business projects.

The XBRL Mandated Forms

As mentioned earlier, the XBRL mandate requires submitting of specific forms quarterly and annually. These forms are related to electric and public utilities, oil, natural gas, and centralized service companies. FERC has adopted the XBRL standard for all filers submitting Forms 1, 1-F, 2, 2-A, 3-Q (Electric) & 3-Q (Natural Gas), 6, 6-Q, 60, and 714, in 2021.

Planning: How and When?

The planning has to start early. Now, the main task of collecting, compiling, and assembling data for all accounting and operational information still remains. The specific milestones for XBRL completion and robust data quality review should be incorporated into filing calendar timelines.

Nowadays, you will come across plenty of options when it comes to choosing software for smart and accurate work and XBRL is no exception. You can choose your solutions to partner among a plethora of options available. After all, the planning of resources, time and budget mainly depend upon the software and service provider you choose.

What is Tagging?

It is basically the allocation of your specific and unique business data within a preset term, known as taxonomy. The reporting information within the forms will be required to be mapped to an element included in FERC’s standard XBRL taxonomy

Now, here you need to know that almost all the energy companies in the US are taking serious preparations on how to file their annual returns by following the procedure of tagging. Here is how you can be compliant with the FERC XBRL mandate.

In-House: You will have to identify and assemble an internal XBRL reporting team and allocate key responsibilities. Additionally, the in-house team needs to learn and familiarize themselves with the FERC taxonomy, including its elements and definitions This is the first step and will require an ample amount of learning time & resources. Next step, you will need to assess the current technology environment for tagging and creating the XBRL instance document in-house either by developing your own XBRL tagging solution or licensing a readily available SaaS solution from the existing XBRL tool vendors. All mandated forms have to be ready to be processed in XBRL and submitted to FERC online before the filing deadline.

Outsource: Partnering with a company that provides the FERC XBRL compliance services can be beneficial and can make your journey stress-free in the very first year. The partnering company comes equipped with XBRL expertise along with an industry-specific experience that can help the timely filing of your forms to FERC online. In any mandated compliance, meeting the deadline is as important as providing correct information that has been captured and submitted during the XBRL filings. Your XBRL partner company will ensure the same and they will guide you through till the end.

Also important to note here, FERC in order to provide the additional time necessary to manage and complete the transition to an XBRL based system, the deadlines for the third quarter filings of the FERC Form Nos. 3-Q (electric), 3-Q (natural gas), and 6-Q (oil) are hereby extended. The deadlines for submitting the third quarter 2021 filings of FERC Form Nos. 3-Q (electric), 3-Q (natural gas), and 6-Q (oil) are now extended until December 31, 2021.

Take advantage of the granted extension to file your FERC forms.

Are you looking for a company to provide you with professional services to comply with the FERC XBRL mandate?

If yes, then you can feel free to get in touch with us. Ez-XBRL Solutions Inc.,

is a global provider of XBRL solutions and services. We are one of the acknowledged leaders in XBRL known to provide solutions and services for analytics, regulatory compliance, and business reporting to customers across the globe. Our dynamic team has created mission-critical, best-in-class products, filed for several patents, and continues to push the envelope in several areas of computer science including NLP, machine learning, and semantic web technologies.

Explore our website for further information or you can call us to know anything related to FERC XBRL compliance. So, why wait anymore? Contact us now to avail of our FERC XBRL services and comply at your end.

XBRL US announced today the public review of the third version of the demonstration Comprehensive Annual Financial Reporting (CAFR) Taxonomy, which now includes seven financial statements, two footnotes, and two schedules from the Single Audit Report. The taxonomy will be published for a 60-day review period to give state and local governments, software providers, municipal securities analysts, and other users of government financial data, the opportunity to review the new and revised data standards and provide input on definitions, references, and the structure of the taxonomy. The taxonomy and supporting materials were prepared by the XBRL US Standard Government Working Group; it is available at https://xbrl.us/xbrl-taxonomy/2020-cafr/

The new release expands on the previous version which contained the Statement of Net Position; Statement of Activities; Governmental Fund Balance Sheet; and Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances.

Version 0.3 now also includes Proprietary Funds statements for Net Position; Statement of Revenues, Expenses and Changes in Net Position; and Statement of Cash Flows. The new release also contains footnotes for Pension and OPEB; as well as the Schedule of Expenditures of Federal Awards, and the Schedule of Questioned Cost, both of which are used in the Single Audit Report.

Single Audits must be filed annually by federal grantees who expend more than $750,000 in federal funds; about 15,000 of single audit filers are state and local governments. With the enactment of the GREAT (Grants Reporting Efficiency and Transparency) Act in December 2019, data standards that render data machine-readable and fully searchable, will be required for information reported in Single Audit Reports submitted by grantees by 2023.

“With the passage of the GREAT Act for grants reporting, building data standards to accommodate Single Audit information is no longer optional,” said Marc Joffe, Senior Policy Analyst at the Reason Foundation and chair, XBRL US Standard Government Reporting Working Group, “XBRL is the most effective means to not only satisfy requirements in the legislation, but to ensure a successful rollout, resulting in greater timeliness, accuracy and automation of reported government financials.”

Materials available for reviewers include the Taxonomy, in XML and spreadsheet format, and a sample XBRL instance document. Those reviewing the taxonomy will have an opportunity to post comments related to individual elements and the structure of the taxonomy.

Members of the XBRL US Standard Government Reporting Working Group include Aquorn Inc., Bond Intelligence, DataTracks, Crowe LLP, Gray CPA Consulting, Intrinio, IRIS Business Services LLC, Lehigh University, Middle Tennessee State University, Novaworks LLC, Reason Foundation, Thales Consulting (CAFROnline), Touro College, Truth In Accounting, Northern Illinois University, the University of Maryland, the University of South Florida, and Workiva. Observers to the Working Group include NASACT (the National Association of State Auditors, Comptrollers and Treasurers) and the US Census Bureau, among other organizations.

The issues with tagging for Levels 3 and 4 requirements are varied but not as daunting as some experts have opined. People have bandied around estimates of over 200 hours just for detailed tagging notes (Levels 3 & 4 requirement). Their concerns are understandable but let us look closer at the pieces of the puzzle and see how they can be put together, particularly by putting to use a combination of intelligent heuristic tools and/or processes.

There are some important items to consider here. Most companies have elaborate disclosures in the form of footnotes and tables that provide details on a range of things including financials, accounting policy changes and business segment reporting. Specifically with the segment reporting, many companies provide a lot of tabular data in their footnotes. These tables vary from a simple two-dimensional structure (such as reporting revenues, expenses or profit details on the vertical axis and business segments on the horizontal axis) to 3, 4 or 5 dimensional tables. Things can get difficult when companies try to map these multi-dimensional tables to the XBRL US-GAAP taxonomy.

To start with, you need to do a detailed company profiling in advance of creating an XBRL filing. This process, I believe as most of the existing filers would have figured out by now, is most critical. The XBRL software used in the mapping process needs to be able to assist users in locating and using these multiple dimensions as well as the respective domain and its members within the taxonomy. Further, ascertaining the requirement of creating a new dimension, domain or member (a matching concept could already exist in a different part of the taxonomy) users also have to deal with the nuances of defining these concepts with pre-specified (required) attributes. Dealing with these details requires a radically different approach to mapping data to the XBRL taxonomy. An efficient and simple tool should enable users to add complex concepts such as a new Member practically on-the-fly.

Narrative paragraph-based footnotes contain numerical data as well as dates that also need to be tagged in XBRL. Reading through the narrative text is informative, imperative and inevitable. However, mapping and tagging is much simpler if the data and dates are in a tabular layout (I am sure SEC considered this as well, which is why they mandated only table tagging in Level 1). Reading and mapping tables is easier than mapping textual paragaphs and it definitely would be a wish-come-true to have a XBRL tool that could translate text into a table on-the-fly.

Certain products provide in-place tagging in the actual document. While, in theory, this is a great feature, in practice the tagging process can break down since users still have to tag individual values and dates to separate XBRL elements. Besides, tools must generate valid XBRL to create the instance document. While the end-result can be accomplished using this method, tagging the data in paragraphs is not quite as simple as it looks.

Having gone through this exercise once, most users would like their XBRL software to have repeatability built into it for that same section of financials the next time around. The software should remember what was mapped from a previous filing so that the time for tagging the new data is shortened. If there are substantial changes to the figures and text in a subsequent quarter or year, users will need to set aside adequate time to ensure that all facts and figures are tagged properly. In conclusion, it is fair to say that tagging of footnotes can be time-consuming and you must set aside enough time and resources to thoroughly analyze your documents before starting the process. You might want to give Ez-XBRL a try and be pleasantly surprised at the powerful and simple way in which it handles a whole host of footnotes tagging issues.

The issues with tagging for Levels 3 and 4 requirements are varied but not as daunting as some experts have opined. People have bandied around estimates of over 200 hours just for detailed tagging notes (Levels 3 & 4 requirement). Their concerns are understandable but let us look closer at the pieces of the puzzle and see how they can be put together, particularly by putting to use a combination of intelligent heuristic tools and/or processes.

There are some important items to consider here. Most companies have elaborate disclosures in the form of footnotes and tables that provide details on a range of things including financials, accounting policy changes and business segment reporting. Specifically with the segment reporting, many companies provide a lot of tabular data in their footnotes. These tables vary from a simple two-dimensional structure (such as reporting revenues, expenses or profit details on the vertical axis and business segments on the horizontal axis) to 3, 4 or 5 dimensional tables. Things can get difficult when companies try to map these multi-dimensional tables to the XBRL US-GAAP taxonomy.

To start with, you need to do a detailed company profiling in advance of creating an XBRL filing. This process, I believe as most of the existing filers would have figured out by now, is most critical. The XBRL software used in the mapping process needs to be able to assist users in locating and using these multiple dimensions as well as the respective domain and its members within the taxonomy. Further, ascertaining the requirement of creating a new dimension, domain or member (a matching concept could already exist in a different part of the taxonomy) users also have to deal with the nuances of defining these concepts with pre-specified (required) attributes. Dealing with these details requires a radically different approach to mapping data to the XBRL taxonomy. An efficient and simple tool should enable users to add complex concepts such as a new Member practically on-the-fly.

Certain products provide in-place tagging in the actual document. While, in theory, this is a great feature, in practice the tagging process can break down since users still have to tag individual values and dates to separate XBRL elements. Besides, tools must generate valid XBRL to create the instance document. While the end-result can be accomplished using this method, tagging the data in paragraphs is not quite as simple as it looks.

Having gone through this exercise once, most users would like their XBRL software to have repeatability built into it for that same section of financials the next time around. The software should remember what was mapped from a previous filing so that the time for tagging the new data is shortened. If there are substantial changes to the figures and text in a subsequent quarter or year, users will need to set aside adequate time to ensure that all facts and figures are tagged properly.In conclusion, it is fair to say that tagging of footnotes can be time-consuming and you must set aside enough time and resources to thoroughly analyze your documents before starting the process. You might want to give Ez-XBRL a try and be pleasantly surprised at the powerful and simple way in which it handles a whole host of footnotes tagging issues.

For all businesses, 10K and 10Q are the most common SEC filings. Each of them serves a different purpose and has a different role in understanding the business.

However, there are multiple differences between 10K and 10Q SEC reporting, which we will explore in this post.

SEC reporting makes one of the most essential tasks for business when it comes to looking for investors.

The SEC forms consist of proper and correct information about the company, which are carefully read by the investors. Starting from the package of CEO, cash in hand, and company age, there are multiple fields in the file that one needs to fill correctly.

#1 WHAT IS 10Q?

The company’s quarterly report is 10Q, which is generally less detailed than the annual report. Hence, the companies have to fill it within 45 days of the end of their quarter. Long run businesses go through many changes that happen before it reflects earning figures. 10Q reports are extremely beneficial for understanding those changes properly.

#2 WHAT IS 10K?

On a contrary, 10K is the annual report that the companies need to produce once a year to SEC. There are details in the depth of the company and therefore, the investors can make a decision wisely by reading this report. It contains every detail of the company’s future growth starting from the CEO’s salary to the company’s financial condition.

#3 FILING TIME

We already know that the Securities and Exchange Commission filing of 10K is done annually, which means once a year. 10Q filing is done quarterly which means three times a year. You need to file a 10Q after every Three months a year.

#4 10K IS DEPENDENT ON 10Q

Though 10K is substantially greater in scope than a 10Q, it is incomplete without the information gathered from 10Q. The experts suggest that for the preparation of 10K, 10Q is needed, whereas, for 10Q, 10K is not required. So, ultimately, 10K is dependent on 10Q.

#5 COMPANY DETAILS

As we have already discussed, 10K consists of every possible company data such as business, property, staff, financial data, executive compensation, and more. 10Q has a few details to mainly show the result of shareholder voting. As a result, 10K reporting has a larger size than the 10Q.

 #6 AUDITED REPORT

10K is generally an audited report while 10Q is unaudited. 10K requires an external auditor to finish the auditing of a company and then formulate a report based on it. 10Q is an unaudited report and it is mainly filled by the company owner, manager, or professional services providing agency.

#7 TIME OF FILING

There are differences in the filing time of these two reports. 10K needs to be done within 90 days after the end of the company’s fiscal year whereas 10Q needs to be done within 45 days after the end of the company’s fiscal quarter.

For accelerated filer, the companies are given 75 days (10K SEC reporting) and 40 days (10Q SEC reporting) of time.

Form 10K is an annual report and is more comprehensive than a 10Q, which consists of quarterly financial statements and the management’s discussion and analysis disclosure.

The investors will compare 10Qs and tell why there were fluctuations between periods. However, 10K is more preferred by the investors as they always want to get more information on the company’s business plan, risks, management team, and financial condition.

Now that you know the differences between 10Q and 10K reporting, go ahead and prepare your papers accordingly.

If you are looking for a company to provide you with professional services in 10K and 10Q SEC reporting, you can feel free to get in touch with us.

We at Ez-XBRL Solutions Inc. provide excellent services in SEC reporting, compliance management, reporting and analysis, state and local government policies management, to name a few.

You can explore our website for further information or call us to know the best packages for you.

We have our web-based applications that are accurate and portable among all computing devices. Multiple advanced features make collaboration and remote accessibility easier on your devices.

So, why wait anymore? Contact us now to avail of our services without much effort on your end.

In their new publication, Building Momentum: Preparing for XBRL in Government, the AGA (Association of Govt Accountants) Journal of Government Financial Management provides details of the need for better and more timely financial information, the need for structured data standards such as XBRL to be leveraged for this, and the benefits that will accrue to various stakeholders. It outlines the current state of publicly-available CAFR or annual audit reports, the need for the use of a reporting standard such as XBRL to facilitate comparability and analysis, and the benefits to all concerned in the process.

The article mentions developments at the Federal level through the DATA Act and the GREAT Act, the developments in Florida for implementing XBRL-based reporting by local governments, and recent developments within the XBRL community through XBRL US and the work done by the State and Local Government Disclosure Modernization working group. Ez-XBRL Solutions has been part of this since its inception and contributed in multiple ways.

The article has been authored by Shannon Sohl, PhD, CPA, Senior Research Associate at Northern Illinois University’s Center for Governmental Studies, Jacqueline Reck, Ph.D., CPA, professor in the Muma College of Business, University of South Florida, and Tammy R. Waymire, Ph.D., CPA, associate professor of accounting in the Jones College of Business, Middle Tennessee State University.