Businesses weigh up iXBRL options

News Article - 18 May 2010
Category: Regulatory

Experts are reporting that businesses may struggle with the demands of the iXBRL online corporate tax filing language when it becomes compulsory in 2011. The introduction of iXBRL has been controversial since first announced, with industry figures claiming the switchover will cost businesses hundreds of thousands of pounds in addition to putting significant strain on resources.

Since the initial iXBRL announcement, a number of objections have been raised regarding the potential administrative and logistical impact of the switchover. In March, HMRC announced plans to revise legislation that required tax advisers to check clients' corporation tax returns when filed in the iXBRL format. Concerns had been raised that this would ramp up pressure on accountants to ensure client returns were legally admissible, which would be of particular concern if the company was also an audit client.

Around the same time a proposal submitted by HMRC asked the Accounting Standards Board to delay the introduction of a replacement for UK GAAP - the accounting system used by non-listed companies operating in the UK - which would have crossed over with preparations for iXBRL filing. HMRC claimed the introduction of two new standards would put too much pressure on accountants' resources.

Although the iXBRL language will only become mandatory in 2011, experts suggest preparations for the change are affecting accounting periods already. Concerned businesses are currently exploring the options available with regard to iXBRL and deciding the most effective method for submitting returns in the required format with regard to cost and time implications.

The variety of options are broad, with some companies deciding to pass responsibility for accurate tagging to auditors, who will export the necessary figures from basic spreadsheets sent on by the client. Other firms may outsource iXBRL tagging and related processes to specialists, whereas those with specialist financial reporting software may have access to upgraded resources that allow tagging to be conducted in-house.

With many options available companies will no doubt be seeking advice on the most cost-effective methods for making the switch. Access is helping accountants by providing business software to more easily extract the financial data necessary to prepare accounts using the iXBRL standard.

Companies concerned regarding the effect iXBRL will have on business operations should speak to their accountant directly.

Article keywords: business software, iXBRL, online corporate tax filing language, UK GAAP

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