IFRS Foundation publishes introductory article on Facilitating Digital Comparability and Analysis of Financial Reports
Apr 11, 2024
On April 11, 2024, the IFRS Foundation published an introductory article, “Digital financial reporting—Facilitating digital comparability and analysis of financial reports,” which sheds light on the significance of digital financial reporting and the pivotal role played by the IFRS digital taxonomies.
The article explains:
- what digital financial reports are and how they are created;
- the benefits of digital financial reporting for investors, companies and regulators; and
- the importance of the IFRS digital taxonomies.
The IFRS article outlines the many advantages of financial reports structured in machine-readable formats like XBRL and iXBRL. They enable efficient data extraction and comparison, empowering investors to make informed decisions on a large scale. These reports also facilitate automated validation checks, technology-driven monitoring, and improved market oversight, fostering transparency and accountability.
It also highlights global regulatory efforts to advance digital reporting. These include the SEC's introduction of XBRL and iXBRL requirements since 2009 for transparent financial disclosures and the EU's ESEF mandates that aim to boost the accessibility, analysis, and comparability of annual financial reports, bolstering investor trust and market integrity.
While Artificial Intelligence (AI) assisted tagging boosts efficiency, human supervision is vital for accountability and data accuracy. Collaboration among regulators, policymakers, software providers, and auditors is essential to preserve the integrity and accessibility of digital financial reports.
Access the article on the IFRS’s website.
