#xbrl

Learn how validation features in your software can protect you from penalties, delays & reputational risks. ✅ Spot issues early ✅ Ensure audit-readiness ✅ Choose the right tools

In the realm of financial reporting, XBRL (eXtensible Business Reporting Language) has become the standard format for submitting financial statements to regulatory authorities. As a business, ensuring the accuracy and compliance of your XBRL filings is crucial. In this blog, we will explore the importance of using an MCA  validation tool for the preparation of XBRL filings. Discover how this tool can streamline the XBRL preparation process, improve accuracy, and ensure compliance with regulatory requirements.

How did you learn about Calcbench? When did you start using the platform? 

I first met [Calcbench co-founder and chief technology officer] Alex Rapp at a conference where he presented Calcbench as a beta-stage product; the year was 2012 or 2013. I thought it was cool tech. Following the conference, I spent time with Alex in Boston and started using Calcbench. 

As an early adopter it’s been great to see the development of the platform over the past decade — it’s changed a lot since the early days! It’s more complex and offers more features.  

Which features do you use on the platform? 

I started using Calcbench’s high-level financial data in my role at Audit Analytics to supplement the data Audit Analytics received from other data providers. My usage evolved into using data from the footnotes. Recently, I started digging into the text search feature. I like to search for information within specific footnotes. 

Depending on the type of the analysis that I am doing, I use either the Company-in-Detail or the Multi-Company page. For example, I recently used the Company-in-Detail page to compare 10-Q filings of the same company. See the excerpt below from my Substack article, Can SEC Comment Letters Shed Light on Crypto Accounting?

We used Calcbench’s Company-in-Detail page to compare Marathon Digital’s disclosure of Digital Currencies Policy between 10-Q filings for the three months ending on March 31, 2023, and June 30, 2023, and identified the following language added to the June 30, 2023 filing:

“Digital assets are included in current assets in the condensed consolidated balance sheets. In addition, digital assets provided as collateral for long-term loans were reported as Digital assets, restricted at December 31, 2022 and classified as long-term assets in the condensed consolidated balance sheets. During the first quarter of 2023, the long-term loan was terminated and the restrictions on digital assets lapsed (refer to NOTE 12 – DEBT, for further discussion).”

The added language could be related to the unresolved comments disclosed in Item 1B of the 10-K filing discussed above. (Interestingly, an SEC comment letter to Microstrategy (MSTR) publicly released on June 9, 2023, also raised questions about bitcoin used as collateral.)

For the recent research piece that I wrote for Calcbench, Understanding Changes to Non-GAAP reporting, I performed a bulk download from the Multi-Company page. 

By the way, I never had a demo from Calcbench. The platform is intuitive and easy to use. 

You have used the platform in academic and professional settings. Explain how that worked for both. 

In a professional setting, I use Calcbench to supplement other data sources. Calcbench helps me with trends analysis. For example, with Calcbench I can easily evaluate changes in disclosure to see where disclosures are moving. With Calcbench, I can understand the difference in ratios over time. 

For academic purposes I use Calcbench’s bulk data for statistical analysis. Calcbench data is in a machine-readable format and is easy to aggregate, which saves time. 

You’re familiar with other data platforms. What data can you get from Calcbench that you can’t get from other providers? 

Believe it or not, one of the variables that I look for, that’s not easy to get elsewhere, is number of shares. While that information may be available at big data providers, it can be expensive or may not be in the format that I need. 

A unique feature that Calcbench offers is XBRL custom tags. This feature is helpful when I need to pull the data related to a particular topic. Let's say I need to identify balances related to the fair value of  Level 3 securities. It is easy to search for "Level 3" XBRL tags and pull the relevant data.

A couple of other things that are not as popular with other providers: revisions and trace history and linking back to the original file. 

What other offerings would you like Calcbench to offer? 

I like getting alerts. It would be great if Calcbench could offer alerts on specific disclosures, such as if a specific phrase shows up in a particular footnote. For example, take discount rates. I would like to get an alert when a discount rate changes in a pension footnote. These days, I am using text search more often and would like to see an expansion of this search. 

Lastly, executive compensation is a hot topic. It would be helpful to how companies are integrating pay-for-performance into their disclosures. 

How much are you paying for gas? Or, more precisely, how much are you paying for gas when flying at an altitude of 32,000 feet in an aluminum tube with several hundred other people?

Airlines, like many businesses, report a wide range of metrics and KPIs in their earnings press releases. Some of those disclosures are downright fascinating, because they tell us so much about how well the companies are performing—and how well those companies are likely to perform in the future, too.

One such metric is average price per gallon of fuel for the period. In general, you would expect prices among airlines to be quite similar. After all, fuel is a commodity, so all buyers should pay a similar price for it, right?

To test that thesis, we examine the disclosures of five airlines:  Delta Air Lines (DAL), Southwest Airlines (LUV), Alaska Air Group (ALK), American Airlines Group (AAL), and United Airlines (UAL). We collected data from their earnings press releases from Q1 2020 to Q2 2023, focusing on the average price of fuel per gallon. The result is in Figure 1, below. 

As expected, we see that average prices for the fuel were generally similar for all five airlines over time. (Remember that this is the price per gallon, so every cent counts and would be significant.) With that in mind, we note a couple of interesting cases.

In Q1 2022, Southwest (the green line in Figure 1) seems to be paying much less than the others. In its filing for that period, the airline said: “While we are experiencing inflationary pressure from higher jet fuel prices, our fuel hedge is providing significant protection against rising oil prices.” The entire filing can be found in our disclosure page.

A similar case happened in Q3 2022 where again, Southwest seemed to be paying less. In that period’s filing, the airline said: “Our fuel hedging strategy continues to provide protection against persistently high jet fuel prices, and we are 61 percent hedged in fourth quarter 2022 and 50 percent hedged in full year 2023. We continue to execute well against our full year 2022 non-fuel cost guidance, despite cost headwinds due to operating at suboptimal productivity levels and significant inflationary cost pressures.” Again, the entire filing can be found in our disclosure page. 

Because we love our subscribers so much, you can use the spreadsheet template which we created on the airlines which we've posted publicly to DropBox.

This might be a bit of inside baseball for some readers, but we’d be remiss if we didn’t note that the Securities and Exchange Commission published a reminder last week for companies to pay attention to the details of the XBRL “tags” they use in securities filings.

The SEC published a sample comment letter about XBRL filings, demonstrating the types of issues that might prompt SEC staff to send a comment letter to a company asking questions about its filings. The agency also included a few paragraphs of guidance about why XBRL is so important to financial reporting and analysis.

XBRL is the data-tagging language companies must use when filing registration statements and quarterly reports to the SEC. Every piece of financial data is tagged in XBRL, which allows other software applications — like, say, Calcbench — to parse that data quickly and precisely. When you sit there wondering, “How does Calcbench do it, making financial analysis so easy?” it’s all thanks to XBRL.

This means, of course, that companies must be diligent in the XBRL tagging they undertake. That’s been the case for years, but Congress underlined the importance of accurate filings when it enacted the Financial Data Transparency Act of 2022. Among other things, the law directed the SEC to improve the quality of corporate financial data.

Clean, accurate XBRL filings are a big part of that push; hence the XBRL guidance last week. 

For financial analysts wondering, “What does this have to do with me?” — honestly, not much. Most companies are quite good with the quality of their XBRL tagging, and Calcbench has a set of quality checks we run ourselves to assure that flawed tags are found and corrected before one ever appears on your search results. 

For corporate filers, the letter is another reminder that you need to practice good financial data hygiene. Most filers already use a dedicated vendor to help them prepare and submit their SEC filings with all XBRL tags in order — but Calcbench does have an XBRL Filer Portal page, where subscribers can check the quality of a company’s XBRL filings. Heck, a company can even check the quality of its own filings, and we extend that service even to companies that aren't Calcbench subscribers. (Just contact us at [email protected] and we'll set you up to review your own filings.)

Using the XBRL Filer Portal

Here’s how it works. First, go to the XBRL Filer Portal, which might well be the most sparsely designed page on the internet. Enter the ticker of whatever company you want to research. See Figure 1, below. 

Calcbench will then return a page that looks something like Figure 2, below. You first see a list of all SEC filings we have on file for the ticker you entered, and seven tabs so you can see what XBRL glitches our database had flagged over the years. Some common glitches include:

Tagging the wrong sign (a positive number instead of a negative one, or vice-versa)

Scale errors, such as where you tag revenue to the precise dollar in one place, but rounded to the nearest million in another

Possible typos

Revised facts, where a company changes previously reported numbers in its current filing (we have an easy way to track revised facts, by the way)

Extensions, where a company devises its own unique XBRL tag rather than using one from the SEC-approved XBRL taxonomy.

We randomly selected the New York Times Co. ($NYT) as a test case for our XBRL Filer Portal. Figure 2 then shows two instances where the Times switched the positive/negative signs for the Debt Securities Available for Sale line item. In both cases, Calcbench shows you the value originally submitted, the date submitted, and the date the company filed an updated, corrected tag. 

To be clear, this does not mean XBRL submissions are filled with errors. On the contrary, error rates are usually quite low. XBRL was designed with validation techniques embedded into the system, and filing vendors have their own quality checks, and financial data warehouses such as Calcbench have their own quality checks on top of that. 

Introduction: Embracing Efficiency in Financial Reporting

In the dynamic landscape of financial reporting, where accuracy, transparency, and efficiency are paramount, XBRL Filing Software India has emerged as a game-changing tool. This article delves into the world of XBRL (eXtensible Business Reporting Language) filing software in India, exploring its significance, features, and the transformative impact it's making on financial reporting processes.

XBRL Filing Software India: Unveiling the Power of Automation

XBRL Filing Software India offers a revolutionary approach to financial reporting by automating the process of data preparation, analysis, and submission. This software enables businesses and organizations to convert financial data into a standardized digital format, ensuring compatibility, accuracy, and easy interpretation. With its advanced features, XBRL Filing Software India ensures that financial reports meet regulatory requirements while saving time and reducing the risk of errors.

Benefits of Using XBRL Filing Software India

Incorporating XBRL Filing Software India into your financial reporting workflow brings forth an array of benefits:

Enhanced Accuracy: The software's automation reduces the likelihood of manual errors during data conversion and submission, ensuring precision in financial reporting.

Time Savings: XBRL Filing Software India significantly accelerates the reporting process, allowing professionals to allocate their time to more strategic tasks.

Regulatory Compliance: The software ensures adherence to regulatory guidelines, helping organizations avoid penalties and compliance issues.

Cost Efficiency: XBRL Filing Software India reduces operational costs associated with financial reporting by minimizing manual effort and errors.

Improved Data Analysis: The standardized data format allows for easier analysis and comparison, aiding in informed decision-making.

Key Features of XBRL Filing Software India

XBRL Filing Software India is equipped with a range of features tailored to simplify and optimize financial reporting:

Data Mapping: Mapping financial data to XBRL taxonomy becomes seamless, ensuring accurate representation.

Validation: The software performs real-time validation, identifying inconsistencies and errors before submission.

Collaboration: Multiple team members can collaborate on reports, enhancing efficiency and accuracy.

Version Control: Maintain a history of previous submissions and updates, ensuring transparency and accountability.

Data Security: Ensure data privacy with robust encryption and access controls.

Adopting XBRL Filing Software India: Best Practices

To make the most of XBRL Filing Software India, consider these best practices:

Thorough Training: Invest in comprehensive training to familiarize users with the software's functionalities and ensure effective utilization.

Quality Control: Implement internal review processes to catch any errors before submission, enhancing the accuracy of reports.

Stay Updated: Regularly update the software to benefit from the latest features and comply with changing regulations.

Engage Experts: Seek guidance from professionals experienced in XBRL implementation for optimal results.

XBRL Filing Software India: Leading the Financial Evolution

XBRL Filing Software India has ushered in a new era of financial reporting, where precision, speed, and compliance converge. Its transformative capabilities not only simplify reporting processes but also enable organizations to make informed decisions based on standardized, accurate data. As technology continues to shape the financial landscape, XBRL Filing Software India stands as a testament to innovation and efficiency.

FAQs about XBRL Filing Software India

What is XBRL Filing Software India? XBRL Filing Software India is a specialized tool designed to convert financial data into the XBRL format, streamlining the process of regulatory reporting and compliance in the Indian context.

Why is XBRL important in India's financial reporting?XBRL simplifies the standardization and sharing of financial information, making it easier for regulatory bodies and stakeholders to analyze and interpret data accurately.

Can XBRL Filing Software India adapt to changing regulations? Yes, reputable XBRL Filing Software India solutions often offer updates to align with changing regulatory requirements, ensuring ongoing compliance.

Is XBRL Filing Software suitable for small businesses?Absolutely, XBRL Filing Software India caters to businesses of all sizes, offering scalability and efficiency in financial reporting.

How does XBRL enhance data accuracy? XBRL minimizes manual data entry, reducing the potential for errors, and incorporates validation checks to ensure the accuracy of submitted data.

What's the learning curve for using XBRL Filing Software India? The learning curve depends on the software's complexity and the user's familiarity with financial reporting concepts. Comprehensive training can shorten the learning process.

Conclusion: Transforming Financial Reporting Dynamics

In today's fast-paced business world, accurate and timely financial reporting is crucial for both businesses and regulatory bodies. With the advancement of technology, the traditional methods of financial reporting have evolved into more efficient and automated processes. One such technology that has gained prominence is the XBRL return software. In this article, we'll delve into what XBRL is, the benefits of using XBRL return software, its impact on financial reporting, and more.

Introduction

In the realm of financial reporting, accuracy and speed are of utmost importance. The introduction of XBRL (eXtensible Business Reporting Language) has revolutionized the way financial information is shared, analyzed, and interpreted. XBRL return software takes the concept further by providing tools and platforms that facilitate seamless XBRL reporting.

Understanding XBRL

XBRL is a standardized language that allows businesses to tag financial data, making it easily understandable by both humans and machines. It adds a layer of context to the financial information, enabling software to categorize, compare, and analyze data efficiently. This standardized approach reduces errors and ensures consistency in reporting.

The Role of XBRL Return Software

XBRL return software plays a pivotal role in simplifying the process of preparing, validating, and submitting financial reports. It offers user-friendly interfaces that guide finance professionals through the tagging process. Moreover, it ensures compliance with regulatory requirements, making it an indispensable tool for companies operating in heavily regulated industries.

Benefits of XBRL Return Software

Streamlined Reporting

XBRL return software streamlines the reporting process by automating the conversion of financial data into XBRL format. This automation saves time, reduces manual errors, and allows finance teams to focus on higher-value tasks.

Enhanced Accuracy

Manual data entry can lead to errors, which might have severe consequences. XBRL return software reduces the risk of errors by applying predefined tags to data elements, ensuring accuracy and consistency across reports.

Improved Transparency

XBRL-tagged reports are easily accessible and shareable. This transparency enhances communication between stakeholders, including investors, regulators, and financial analysts, leading to better-informed decision-making.

How XBRL Software Works

XBRL return software operates by mapping financial data to a standardized set of tags defined by regulatory authorities. These tags categorize each data point, such as revenue, expenses, assets, and liabilities. The software then generates XBRL-formatted reports that can be submitted to relevant authorities.

Implementing XBRL in Financial Reporting

Integrating XBRL into the financial reporting process involves several steps. First, companies need to identify the relevant data points for reporting. Next, they apply XBRL tags to these data points using the software. Once tagged, the software compiles the data into a structured XBRL report.

Enhancing Accuracy and Transparency

XBRL return software's automated tagging minimizes the risk of errors in financial reports. Additionally, the transparency of XBRL-tagged data fosters trust among stakeholders, as they can verify and cross-reference information effortlessly.

Impact on Regulatory Compliance

Regulators require companies to submit accurate and timely financial reports. XBRL return software simplifies compliance by generating reports that adhere to regulatory standards, reducing the chances of fines or penalties due to non-compliance.

Challenges and Considerations

While XBRL return software offers numerous benefits, its implementation comes with challenges. Companies must ensure proper training for staff, select the right software provider, and stay updated with changing regulations to maximize the software's effectiveness.

Choosing the Right XBRL Software

Selecting suitable XBRL return software involves evaluating factors such as user-friendliness, integration capabilities, customer support, and pricing. It's essential to choose a solution that aligns with the company's unique needs and goals.

Integration with Existing Systems

Integrating XBRL return software with existing financial systems can streamline the reporting process further. Compatibility with existing software ensures a smooth transition to XBRL reporting without disrupting ongoing operations.

Future Trends in XBRL and Financial Reporting

As technology continues to evolve, XBRL return software is likely to become even more sophisticated. Predictive analytics, AI-driven insights, and real-time reporting capabilities could shape the future of financial reporting, making it more efficient and insightful.

Case Studies: Successful XBRL Implementation

Several companies have successfully integrated XBRL return software into their reporting processes. For instance, Company X streamlined its quarterly financial reporting, reducing preparation time by 50% and improving data accuracy.

FAQs About XBRL Return Software

What is XBRL return software?XBRL return software is a tool that helps businesses convert financial data into XBRL format for standardized and accurate reporting.

How does XBRL software enhance reporting accuracy?XBRL software automates the tagging process, reducing manual errors and ensuring consistent reporting.

Is XBRL return software suitable for small businesses?Yes, XBRL return software comes in various packages, making it accessible to businesses of all sizes.

Can XBRL return software be integrated with accounting systems?Absolutely, integrating XBRL software with accounting systems enhances data accuracy and streamlines reporting.

What's the future of XBRL return software?The future holds advanced features like AI-driven insights and real-time reporting, making financial reporting even more efficient.

Conclusion

In the realm of financial reporting and analysis, XBRL (eXtensible Business Reporting Language) software has emerged as a game-changer, streamlining the way organizations manage and share financial data. This article delves into the significance of XBRL software in India, highlighting its advantages, implementation, and impact on the business landscape.

Introduction to XBRL Software

XBRL software, designed to enhance the efficiency of financial reporting, stands for eXtensible Business Reporting Language. It allows businesses to encode, store, and exchange financial data in a standardized and machine-readable format. This streamlining of financial information benefits various stakeholders, including regulatory bodies, investors, and analysts.

Simplifying Financial Reporting with XBRL

In the traditional paper-based reporting era, businesses faced challenges in collating and disseminating financial information accurately and promptly. XBRL software simplifies this process by providing a digital platform where financial data is tagged with specific labels, making it comprehensible for both humans and machines.

Ensuring Accuracy and Consistency

With XBRL, the likelihood of errors stemming from manual data entry is significantly reduced. The standardized tags ensure that each element of financial data is consistently represented, mitigating the chances of misinterpretation. This accuracy fosters better decision-making.

Cost Efficiency and Time Savings

XBRL eliminates the need for repetitive data entry and manual cross-referencing. This not only reduces the likelihood of errors but also frees up valuable time for finance professionals to focus on strategic tasks. Consequently, companies experience cost savings and operational efficiency improvements.

Regulatory Compliance Made Easier

In India, compliance with regulatory bodies such as the Ministry of Corporate Affairs (MCA) requires accurate and timely financial reporting. XBRL software facilitates the seamless generation and submission of reports, ensuring adherence to regulations without the usual hassles.

Enhancing Data Analysis and Interpretation

XBRL-tagged data is conducive to analysis by both humans and machines. Investors and analysts can leverage this structured data to gain insights into a company's financial health. The software's ability to facilitate in-depth data analysis enhances transparency and informed decision-making.

XBRL Implementation Challenges

While the advantages of XBRL software are evident, its implementation can pose challenges. Adapting to new technology, training staff, and integrating the software into existing systems are some hurdles that businesses might face.

Overcoming Implementation Hurdles

To successfully implement XBRL software, companies must invest in comprehensive training for their finance teams. Collaborating with experienced XBRL solution providers can smooth the transition and help in integrating the software seamlessly.

The Future of XBRL in India

As India's business landscape continues to evolve, XBRL software is expected to play a pivotal role. With the government's emphasis on digital transformation and transparency, XBRL will likely become the standard for financial reporting, fostering a more connected and informed financial ecosystem.

Conclusion

Incorporating XBRL software in India's financial reporting practices brings a host of benefits, including accuracy, efficiency, and compliance. The software's ability to simplify data analysis and interpretation further contributes to better decision-making processes. As India embraces digital innovation, XBRL is set to revolutionize financial reporting for a more transparent and connected future.

FAQs

Q1: What is XBRL software?

A: XBRL software stands for eXtensible Business Reporting Language software, which helps businesses encode, store, and exchange financial data in a standardized format.

Q2: How does XBRL software enhance accuracy?

A: XBRL's standardized tagging minimizes manual errors and ensures consistency, leading to accurate financial data representation.

Q3: Can XBRL software be integrated with existing systems?

A: Yes, businesses can integrate XBRL software with their existing systems, although it might require collaboration with experienced solution providers.

Q4: What benefits does XBRL bring to data analysis?

A: XBRL-tagged data facilitates in-depth data analysis, enabling investors and analysts to gain valuable insights into a company's financial performance.

Q5: What does the future hold for XBRL in India?