Mastering the Art of XBRL: 9 Essential Tips for Preparing XBRL Financial Statements

Preparing XBRL (eXtensible Business Reporting Language) financial statements requires attention to detail and a good understanding of both financial reporting and XBRL taxonomy. Here are some tips to ensure accuracy and efficiency when preparing XBRL FS:

1. Prepare financial statements (“FS”) first

   
   

   Ensure that your FS are complete, accurate and finalised before starting the XBRL tagging/ filling process to prevent re-work or further rounds of review and amendments.

   
   

2. Prepare XBRL FS based on current year’s (i.e. latest) FS

   
   

   If there is/ are reclassification(s) of prior year/ comparative figure(s) in the current year’s FS, tag/ fill up the comparative figures based on how they appear in the current year’s FS. Do maintain a record of description of the reclassifications in case you are asked to provide details.

   
   

3. Be familiar with XBRL taxonomy

   
   

   To enhance the comparability of financial data/ information, the ACRA Taxonomy is a closed taxonomy and is not extensible. Preparers are not able to add or define their own labels in XBRL FS. As such, understanding the structure and elements (i.e. XBRL labels) of the applicable XBRL taxonomy would enable the preparers to better identify data and information in the FS that are relevant or required in XBRL FS.

   
   

4. Tag accurately, appropriately and consistently

   
   

   Ensure each FS item is tagged to the most appropriate XBRL label. Examples: (a) Depreciation should be tagged to ‘Depreciation expense’ and not ‘Amortisation expense’; (b) It is more appropriate to tag distribution costs to ‘Sales and marketing expense’ rather than ‘Other expenses’; and (c) As there is no ‘Administrative expenses’ in ACRA Taxonomy, it is most appropriate to tag it under ‘Other expenses’. There is ‘Employment benefits expense’ (“EBE”) in ACRA Taxonomy. Thus, EBE should be excluded from (if they are included in) other items of expense and tagged under ‘EBE’ in XBRL FS. If the company incurs payroll costs, there would be an EBE note in the FS.

   
   

5. Make references in XBRL FS

   
   

   Make use of ‘Company Label’ and ‘Note’ columns in XBRL template to fill in the exact names of accounting items and FS note numbers for easy reference in future. If an XBRL FS line item is made up of a few line items in FS, show the breakdown in a footnote.

   
   

6. Document your tagging decisions in MS Excel spreadsheet

   
   

   The conversion of FS to XBRL FS may involves reclassification of multiple or too much items in FS to suit XBRL taxonomy. In such case, it would be better to perform these reclassifications in an MS Excel spreadsheet. This not only serves as a record of tagging decisions but also automates the summation of figures, significantly reducing arithmetic errors.

   
   

7. Cross-check manually

   
   

   Arithmetic errors and inconsistencies are expected to be detected during the validation process. However, errors in classification and items that could not be cross-checked within the XBRL FS may not be detected during validation. It is thus important to run through the FS page by page and cross-check relevant figures and disclosures in FS to XBRL FS to ensure completeness and accuracy.

   
   

8. Check whether possible errors are valid

   
   

   Possible errors are possibly errors and need to be looked into too.

   
   

9. Start early

   
   

   Begin the XBRL FS preparation process as soon as the FS is finalised as in the process of preparing XBRL FS, preparers may detect rounding or other errors in the FS that need to be corrected.

   
   

The preparation of XBRL FS can be considered an art - The more you practise, the better you get. It can also be a time-intensive process, often diverting valuable or limited staff resources from core tasks and activities. To address this challenge, many companies find it beneficial to outsource their XBRL FS preparation to a trusted professional services provider like Aventus Corporate Services.

Our team of experienced professionals, based in Singapore, ensures the highest standards of quality and timeliness in delivering accurate XBRL FS that are fit for filing purpose. By leveraging on our expertise, clients can focus on their strategic or operational priorities while we handle the complexities of XBRL reporting.

Advantages of Aventus' XBRL Solutions:

• Fast turnaround - XBRL FS would be ready within 5 business days. We accommodate to more urgent requests where possible.

  
  

• Reliable and approachable – XBRL FS are prepared by in-house Singapore staff who are familiar with XBRL requirements. Feel free to contact staff in-charge directly for any clarification (if required).

  
  

• Clear referencing in XBRL FS - Computation/ workings in MS Excel spreadsheets (if any) are part of our deliverables and would be provided to clients to facilitate review of XBRL FS and for safekeeping.

  
  

• Cost-effectiveness – Our service fees are priced reasonably.

Partner with us to simplify or enhance your XBRL reporting process and achieve seamless compliance with confidence.