Starting in fiscal year 2025, many larger companies must legally submit their annual statements in iXBRL format according to CSRD regulations. But what is iXBRL, and how do you make the switch? Discover our 4-step approach to transition to iXBRL smoothly.
Is your company required to use iXBRL?
Before we get into the 4 steps, let’s determine if your company is required to use iXBRL. Starting in fiscal year 2025, the Corporate Sustainability Reporting Directive (CSRD) comes into effect, with mandatory guidelines for an annual report with financial and non-financial statements. If your company falls under CSRD regulations or is classified as a Large enterprise, submitting your annual statements in iXBRL will be mandatory.
If you’re a smaller company and do not fall under CSRD regulations, using iXBRL is not mandatory. However, it might still be handy to share your reporting in iXBRL, XBRL, or SBR, as automating the sharing of your annual reports makes this process more efficient and less error-prone.
What is the difference between iXBRL, XBRL, and SBR?
iXBRL, XBRL, and SBR all have the same goal: to share your annual statement with institutions in an automated way. The iXBRL format allows banks, governments, and other stakeholders to read your financial and sustainability information automatically. Basically, iXBRL is an adapted version of XBRL that is human-readable.
What do you need for an iXBRL annual statement?
This new requirement demands a new way of looking at your processes and systems. In short, creating an iXBRL-compliant report requires three key elements:
- An iXBRL taxonomy
A structured set of standard and company-specific concepts that align with your financial and non-financial (for example, sustainability) statements. These concepts include items like inventory, cash flow, revenue, and operational cash flow. Custom concepts may also be necessary to reflect your company’s unique details. - Annual report statement tables
Your yearly financial and non-financial data organized in Word documents, Excel tables, or both. - The right software
A tool that links your financial and sustainability statement content in text and tables to the taxonomy.
Four steps to switch to iXBRL
We’re always looking for ways to optimize and automate the reporting process. Therefore, we’ve created a four-step approach to help you switch to the new iXBRL requirement. Using these four steps, the transition to iXBRL becomes a manageable process:
- Step 1. Analyze your annual statements:
Identify and map the relevant sections of your yearly annual report. Based on this, determine the appropriate taxonomy. - Step 2. Develop customized templates
Create tailored Word and Excel templates that fit your company’s specific needs and taxonomy. - Step 3. Input your data
Fill the templates with the required information. - Step 4. Generate and validate the iXBRL report
Create a validated iXBRL financial and sustainability statement that meets all legal requirements for submission to institutions such as the Dutch Chamber of Commerce (KvK).
Ready for a smooth transition to (i)XBRL?
Switching to iXBRL demands specific tools and expertise. We will help you transition smoothly while ensuring your annual reporting stays compliant. Are you a smaller company that is not required to use iXBRL? We can also support you with the transition to XBRL.
Contact us today to discuss how we can support your organization to become iXBRL or XBRL compliant.