The JSE Securities Exchange (JSE) on Friday became the first major stock exchange in the world to report its financial statements according to International Financial Reporting Standards (IFRS) using eXtensible Business Reporting Language (XBRL).
XBRL is an electronic format or language that aims to streamline and simplify the flow, preparation and analysis of financial reports and accounting data.
“As world economies grow more and more intertwined, we believe it is imperative for the JSE to stay ahead of recent developments in the financial and business reporting environment,” the JSE’s chief financial officer, Freda Evans, said in a statement.
“The JSE has reported its results using international standards since 2002, so it was the natural next step to use XBRL, which adds another layer of transparency and efficiency to the process.”
She added that financial reporting in XBRL format will improve the ability of fund managers, analysts and retail investors to analyse companies and make appropriate comparisons, thus improving their investment decision-making.
XBRL was developed by XBRL International, a global consortium of accounting societies, financial institutions, technology companies and other financial-industry constituents working together since 1998. It is currently a format for financial reporting that many financial institutions around the world have implemented or are considering implementing.
XBRL’s data tagging acts like a bar code, identifying the various components making up financial statements. The tags allow the data’s meaning to remain clear and contextually accurate, even when data is transferred between various parties.
XBRL allows for easier adaptation of changing reporting needs, including the conversion from local GAAP to IFRS.
“The South African Institute of Chartered Accountants [Saica] believes that XBRL will impact and simplify financial reporting in the future significantly. Hence, the Saica board has approved this as a leadership issue for the Saica secretariat to explore and investigate further.
“It is critical that an independent organisation facilitates the XBRL process in each country and Saica will get involved at this level,” says Linda de Beer, senior executive: standards at Saica.
“At the JSE, we see XBRL as a key enabler for companies required to report according to IFRS in 2005. This development is also in line with the JSE’s efforts to bring greater transparency to the market and improve efficiencies in the preparation and communication of financial information,” Evans concluded. — I-Net Bridge