In Singapore, businesses are required to submit their financial statements in XBRL (eXtensible Business Reporting Language) format to the Accounting and Corporate Regulatory Authority (ACRA). However, many business owners are unfamiliar with XBRL and may find it quite different from traditional financial statement formats.
In this article, we’ll explore the key differences between XBRL and traditional financial statements and explain how automated accounting tools like ccMonet can simplify the XBRL filing process.
XBRL is a global standard for exchanging business information and financial data. In Singapore, ACRA mandates the use of XBRL for the submission of financial statements. XBRL is structured and machine-readable, making it easier for regulators, investors, and businesses to analyze and compare financial data across companies.
XBRL allows for consistent reporting, reduces errors in data interpretation, and improves the efficiency of financial reporting.
Traditional Financial Statements:
Traditional financial statements, such as income statements, balance sheets, and cash flow statements, are typically generated in formats like PDF, Excel, or Word. These reports are usually static documents, meaning that the information is displayed in a human-readable form without embedded metadata or machine-readable elements.
XBRL Filing:
XBRL, on the other hand, is a structured, machine-readable format designed specifically for data exchange. It organizes financial data into standardized tags that can be automatically processed by software and analyzed by regulators and investors. These tags help identify each data element (like revenue, assets, liabilities) in a consistent way, which is not possible with traditional formats.
In XBRL filings, all financial data is tagged with pre-defined labels, making it easy for both the system and users to understand and process the data.
Traditional Financial Statements:
In traditional reports, financial data is presented in tables or paragraphs. This format is easy for humans to read but not as easily processed by computers. If you want to analyze the data, you may need to manually extract key figures and input them into another system or spreadsheet for further processing.
XBRL Filing:
Since XBRL files are structured with tags, they are instantly ready for analysis by any software or system that supports the format. This allows regulators, investors, and other stakeholders to quickly access specific data points and perform comparative or in-depth analysis across companies. This level of automation speeds up data processing and decision-making.
Traditional Financial Statements:
Traditional financial statements typically follow a basic format based on accounting standards like the Singapore Financial Reporting Standards (SFRS). However, this format can vary slightly between businesses, depending on their specific needs or preferences. Customization may involve creating additional reports, summaries, or supplementary notes.
XBRL Filing:
XBRL is designed to follow specific taxonomies (frameworks for classification) established by regulators, ensuring consistency across all filings. For example, in Singapore, ACRA has its own taxonomy for company reporting. XBRL filings are not flexible in the same way as traditional formats because they must adhere to these predefined standards. While this ensures uniformity, it also makes it easier for the data to be processed and compared across companies.
Traditional Financial Statements:
In traditional formats, error detection often involves manual checks. If you are submitting financial statements as PDFs or Excel files, there’s a higher chance that data entry errors, omissions, or discrepancies could go unnoticed. Additionally, ensuring compliance with the relevant accounting standards requires careful review, which can be time-consuming.
XBRL Filing:
XBRL filings have built-in validation checks that immediately flag errors or inconsistencies before the data is submitted. If there are issues with how data is tagged or formatted, the filing system will highlight them, helping ensure that the submission is compliant. This reduces the risk of mistakes, delays, or regulatory penalties.
Moreover, XBRL ensures that the data submitted follows the regulatory requirements, eliminating the need for manual intervention or cross-checking.
Traditional Financial Statements:
Generating traditional financial statements can involve a lot of manual work, particularly if the company has a complex structure or if there are discrepancies that need to be resolved. Preparing the reports, ensuring accuracy, and reviewing them for compliance can take a significant amount of time.
XBRL Filing:
XBRL filing streamlines the process by automating many of the steps. Accounting tools like ccMonet integrate directly with your financial data and can automatically generate XBRL-compliant reports. This means less manual input, fewer chances for error, and a faster filing process. AI-powered tools can even automatically categorize transactions, reconcile accounts, and generate the necessary XBRL files — saving time and reducing stress.
Automated accounting platforms like ccMonet are designed to make the XBRL filing process seamless. Here’s how:
While traditional financial statements offer flexibility and ease of use for human readers, they don’t provide the same efficiency or error-reduction as XBRL filings. XBRL’s structured, machine-readable format ensures that your data is compliant and ready for analysis, making it easier to file with regulators and analyze your company’s performance.
Automated accounting tools like ccMonet make XBRL filing easier by integrating AI-powered bookkeeping with XBRL generation and validation features. This can save time, reduce errors, and simplify the filing process for SMEs.
👉 Learn more about how ccMonet can simplify your XBRL filing and accounting needs today.
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