Banks Set to Adopt XBRL for Financial Reporting
EghtesadOnline: According to the CBI governor Ali Salehabadi, XBRL standard will be tested in one of the banks in February and later other banks will be required to submit their financial reports accordingly
The Central Bank of Iran is to announce XBRL (eXtensible Business Reporting Language) standards for financial reporting by banks.
According to the CBI governor Ali Salehabadi, this standard will be tested in one of the banks in February and later other banks will be required to submit their financial reports accordingly, IBENA quoted him as saying.
XBRL is a language for the electronic communication of business and financial data which is revolutionizing the business reporting around the world.
It offers major benefits to those who create, transmit, use or analyze such business information. Some benefits of XBRL include cutting costs, greater efficiency, improved accuracy and reliability for those supplying or using financial data.
The basic idea behind XBRL is that instead of treating financial information as a block of text or numeric items, a unique electronically readable tag is attached to each individual financial term.
It is not just the data or text that floats around, these individual items move along with an electronic tag. Thus, it is not just the 'content' but also the ‘context’ that is transmitted.
Standardization of data elements is achieved in XBRL by defining a set of taxonomies. Taxonomies have to be in sync with the global taxonomies recognized by the XBRL International Inc., which is a consortium of regulators, financial standard bodies and technology providers. XBRL is an open standard.
The process of developing XBRL taxonomies for Iran’s banking sector began in 2019. The Monetary and Banking Research Institution (MBRI), the research arm of the CBI, and the Informatics Services Corporation (ISC), a CBI-affiliated body in charge of developing technological solutions, were tasked with the project.
MBRI and ISC have finalized the new system, Mehrdad Sepahvand, head of the banking department at MBRI said. "Initially, banks will start filing and submitting their financial reports based on the new standard."
On completion of the next phase of the project, “banks will be able to attach notes to the financial reports, and in long term we plan to extend the standard for banks' internal records," Sepahvand added.
Banks currently submit their financial reports via the CBI's MAHTAB system, in which they upload reports that are created in print format.
"XBRL standardizes data including features that improve the quality of the financial data, including verification checks and easy presentation of data."
According to the official, XBRL is expected to have a major positive effect on the efficiency of CBI supervision of bank performance, as the submitted data can be learnt by machine and observed instantly without interference.
Using the standard and plugins, the CBI will be able to create valid, efficient and comprehensive reports that would function as a reliable and useful reference for policy and decision makers.