XBRL eXtensible Business Reporting Language TADетали

What is XBRL

The world of business is often bureaucratical — both the large companies, and the small enterprises constantly report on the actions. This reporting is very various — it can be tax declarations or some internal documents which contain a large number of data, and it is necessary to be engaged in them with high frequency. Once it was exclusively manual work, and in process of increase in number of regulators it turned into this testing. Often same data needed to be entered in different forms for different inspection bodies.

In process of development of technologies, the new electronic format of the reporting — XBRL was thought up (eXtensible Business Reporting Language — the expanded language of the business reporting). The organizations which pass to it are not engaged in duplication of the same data in tens of different forms for different structures any more. Instead business in a certain format enters all data on the activity, and already regulators or other organizations select information necessary to them.

This open standard of exchange of business information with the unified requirements and uniform data model allows to prepare the analytical reporting in different cuts. Most the large foreign organizations prepares and hands over the reporting using this format. The XBRL language has flexible structure and allows to operate with the large volume of data prepared according to the principles of IFRS, Basel, Solvency and others.

XBRL as a method of exchange of business information is rather widely used by large regulators of the USA, Europe and Asia. It is no wonder that on this way also Russia went. Compliance to the international standards opens the new markets for the Russian businessmen, allows to gain new knowledge to local entrepreneurs and to speak one language with foreign investors. Implementation of the XBRL format increases reliability and financial stability of the companies due to gain of control over them. It is absolutely new technology of interaction, new level of the organization and data management.

This format is quite often compared to Esperanto — he only got accustomed better, than uniform language. Russia entered the independent international organization of XBRL International which develops and develops the standard, in 2015, having added the impressive list from 35 countries in which almost all members of the G20, BRICS and the EU are mentioned. In XBRL International there are more than 600 participants: separate companies, associations, state bodies.

XBRL International defines taxonomy - it is the exact description of what should or can contain in the report of the organization which works in this or that sphere. The taxonomy consists of concepts on which the reporting is prepared. Certain facts which allocate contents with sense are coordinated to each of concepts in the report. Uniform semantic value and completeness of the transferred information which are not depending on an interpretation method became a main objective of XBRL.

Center  for implementation and development of the XBRL format

With summer of 2018 in Russia there began work the Center  for implementation and development of the XBRL format created at the initiative of the Bank of Russia. As noted the regulator, the Center will be responsible for development and implementation in the Russian financial market of the international unified format of the business reporting of XBRL. The Bank of Russia since 2018 uses XBRL for collecting and processing of supervising and statistical and accounting (financial) records of insurance companies, non-state pension funds, prof participants of the securities market and management companies. In the long term use of this format will become obligatory and for other non-credit financial institutions (NCFI)^[1].

The supervisory board of the Center was headed by the First Deputy Chairman of the Bank of Russia Ksenia Yudayeva. "Further development of methodology of a data model of XBRL, certification and training of specialists with a format, study of a possibility of creation of the Center of testing Regtekh of applications in the field of XBRL, including taking into account experience of the XBRL International international consortium will become the main objectives of the Center", – K. Yudayeva emphasized, speaking at the opening ceremony.

Transition to the international format of the business reporting of XBRL – one of key projects of the Bank of Russia. Use of XBRL will allow to increase reliability and quality of reporting data, to exclude their redundancy and duplication, will give to the regulator an opportunity more quickly and precisely to select the necessary cuts of information and it is simpler to structure it. In the long term it will lead to reduction at NFO of finance and temporary costs on preparation of the reporting.

In world practice the XBRL format is used not only in financial, but also in other sectors of economy. Governmental bodies, the collecting reportings actively use it. This experience can be useful in Russia when implementing the program of digitalization and in particular within creation of a national data management system. The deputy minister of digital development, communication and mass communications of the Russian Federation Alexey Kozyrev, the Deputy Minister of Economic Development of the Russian Federation Azer Talybov, the director of the department of information technologies in the field of management of the public and municipal finances and information support of budget process of the Ministry of Finance of the Russian Federation Elena Chernyakova and also representatives of professional community participated in the opening ceremony of the Russian Center for implementation and development of the XBRL format, in addition to bank representatives of Russia and XBRL International.

What organizations and when should pass to a new format

Since January 1, 2018 XBRL became the mandatory standard for the Russian non-credit financial institutions. Specific plans for credit institutions are not read yet. But a similar step it will be explicit logical continuation of already made.

What is the time preparation for transition to a new format of the reporting borrows

The Central bank of the Russian Federation in March, 2016 released basic taxonomy of XBRL — the uniform data model including various indicators which can contain in reports. Now and to some Russian organizations it is not necessary to enter identical data in different reports — they are duplicated automatically. Speed of transition will be determined by the general readiness of the company for automation.

"In the presence in credit institution of the corporate data warehouse (CDW) which is not containing errors corresponding to taxonomy, and the ready automated reports, implementation of XBRL will be limited to installation or independent product development which converts data into the XBRL format — Nadezhda Kalashnikova, the senior consultant of Neoflex company tells. — In the absence of KHD, before implementation of XBRL creation of the data warehouse, check of their quality and algorithmization of closing statements for understanding of that information which will be automatically generated in the regulator will be required.

It is almost impossible predict the exact time which takes away transition. Eventually, everything depends on technical and a business maturity of the organization.

How to automate data collection for XBRL

Changes will be required as at the level of IT infrastructure, and the software. It is necessary to develop target architecture of collecting, processing and data analysis which would answer the principles of XBRL. Already depending on the selected software changes of IT systems for automation of formation of accounting, supervising and statistical reporting can be required.

Approach of creation of the reporting on the basis of the specialized systems and data warehouses is most often used. It allows to consolidate all necessary information from the different systems that then on its basis to construct the qualitative verified reporting. We enclosed our experience of creation of the reporting in the product Neoflex Reporting which more than 20 banks of TOP 100 use now — Nadezhda Kalashnikova notes.

How to prepare data from the accounting systems and to control their quality?

The Central Bank announces that in taxonomy enough the indicators used for the automated validation of the reporting on the party of persons under surveillance of the organizations and the Bank of Russia will be put.

But as credit institutions should control quality of the transferred data before sending to the regulator, there is an issue of installation of a system of quality check of data in KHD with setup of checks under specifics of the specific enterprise.

XBRL is capable to open all deep problems with quality and completeness of data. The error on this segment can have sad consequences because the principle of creation of XBRL allows the regulator to study in detail all forms of control accounting and financial, supervising and statistical reporting and also to carry out cross-data validations. Any unreliable information transferred to the regulator involves imposings of penalties on credit institution, up to revocation of license.

The key moment transition from a formocentrichnost to a datacentrichnost with all that it implies from here is considered conversions. It is clear, that it will hardly be possible to do without data transfer, and it will need to be made, without interrupting business processes. Digital transformation will add problems: it is necessary to inlay in new XBRL reality work with Big Data or, for example, with machine learning.

Whether it is possible to manage the converter provided to the Central Bank of the Russian Federation

The Russian Central Bank created own converter which should help the organizations to open at first taxonomy and to manually create data for further transfer to the XBRL format. Data can also be loaded into it from the external file. When filling duplicative data are removed, and the indicator entered once is displayed at once in all forms at which it is present. After that automatic validation is available.

However, the Central Bank even at start of the converter announced that it will support its work only till 2021. It means that once business all the same should use solutions of third-party vendors.

The task of transformation of data in the XBRL format occupies the smallest share in preparation, check and data transmission. For our clients who already use the solution Neoflex Reporting for preparation of the bank reporting the problem of data preparation is not necessary. And, besides, in the nearest future we are going to provide them as well the converter to offer complex approach for the solution of tasks, important for our customers" — Nadezhda Kalashnikova notes.

In general, experts incline that the converter of the Central Bank is convenient at first, however solutions of vendors will help to deliver the company at once on rails on which it will move still for many years.

What there is project cost of

Now there is a number of paid and free developments, each of them has advantages and shortcomings. For a right choice of credit institution it is necessary to carry out the analysis of the available solutions, processes and to formulate requirements which they want to put in a new system.

In general, costs will be involved by both the analysis of the current situation, and assessment of present IT systems, and an agreement of the operating system of indicators with the system of the Bank of Russia. For the sake of high-quality management accounting it is necessary to develop additional analytical indicators and business rules. But the main costs all the same will fall on KHD, software and adjustment of IT systems under requirements of XBRL. You should not forget also about need of training of employees, development of instructions and regulations.

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