Keeping up with IFRS Taxonomy updates
When the IFRS Accounting Taxonomy changes, why IFRS 18 matters for tagging, and a simple routine for keeping a firm's tagging in step.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
A firm that tags statements once a year can easily tag them against last year's dictionary. Nobody rings to announce the change at a client's year end. The new taxonomy simply appears on the standard-setter's website, and the tagging tool keeps using whatever version it was last given.
Keeping up is not difficult, but it has to be somebody's job. This article sets out how the IFRS Foundation says the IFRS Accounting Taxonomy changes, and a routine for staying in step.
Why the taxonomy changes at all
The IFRS Foundation states that the IFRS Accounting Taxonomy reflects the presentation and disclosure requirements of IFRS Accounting Standards, with elements drawn from implementation guidance and illustrative examples as well. When the requirements move, the dictionary has to move with them.
The Foundation says exactly that: updates are released when the IASB issues new or amended IFRS Accounting Standards that affect taxonomy content. It adds that updates may also follow an analysis of disclosures commonly reported in practice, or aim to improve general content or technology.
That second route matters more than it first appears. The Foundation states that the taxonomy contains elements for disclosures not specifically required by the Standards but commonly reported in practice. As it studies what companies actually disclose, elements can be added for items that no standard demands. A client line that had no standard element last year may have one now.
The annual release in the first quarter
According to the IFRS Foundation, it usually publishes the annual IFRS Accounting Taxonomy, a compilation of the updates published during the year, in the first quarter of each year.
That gives a practice a natural rhythm. Individual updates can appear whenever a standard is issued, but the consolidated annual version arrives early in the calendar year. A firm with many December and February year ends meets it just as the reporting season begins. Note the word "usually" in the Foundation's wording, and check the page rather than assuming a date.
Remember, too, that the version a filing must use is set by the regulator receiving it, not by the date the IFRS Foundation publishes. A new IFRS release does not automatically become the version a companies register accepts.
Updates go out for comment first
The Foundation states that taxonomy updates are subject to public consultation. Proposed changes are published before they are final, which gives preparers and software providers an early view of what is coming.
A firm need not comment on every proposal. Reading the proposals that touch standards affecting many of its clients is, though, a sensible use of a technical manager's time. It shows which elements are likely to be added, renamed or withdrawn before anyone meets the change in a live file.
IFRS 18: a change worth watching
IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1, and the IFRS Foundation says the IASB concentrated on the statement of profit or loss when developing it. Since the taxonomy follows presentation and disclosure requirements, and updates follow new standards, taxonomy changes linked to IFRS 18 are to be expected. Do not guess at their detail. Read the Foundation's releases and consultations as they appear, and check when each regulator you file with adopts them.
There is a quieter consequence as well. Line items and subtotals in the income statement may change under IFRS 18, so mappings that pointed to a familiar line may need a fresh look. That is mapping work before it becomes tagging work.
No live feed in Achekam: a manual watch
Be clear about what Achekam does here. It does not pull a live feed of standards and regulatory changes. Its Standards & Regulatory Updates page shows what its knowledge base records, which is a starting point, not an alert service. A new taxonomy release, an IFRS 18 update or a regulator's change of version is something the firm itself has to notice and act on.
What Achekam does help with is keeping presentation choices stable while the standards move. A firm can add its own statement lines and groups and reword any row title, and later builds keep those choices. Because every custom line totals into a standard line, notes, cash flow and tags remain consistent. When an element changes, the firm reviews the standard line its client-specific lines roll up to, rather than chasing dozens of custom lines one by one.
On the iXBRL file itself: Achekam produces iXBRL for South African clients only, and does not produce it for Nigerian or Kenyan clients. Its built-in taxonomy is a partial list Achekam wrote, so it makes test packs; a production pack is refused until someone uploads and approves the official CIPC taxonomy package, and Achekam does not file with CIPC. Which package is loaded is therefore a decision a person makes and records. The South African steps are in CIPC iXBRL test packs.
A routine for the technical lead
A short standing routine keeps a firm in step:
- Name one person responsible for taxonomy and standards changes, with a deputy.
- Check the IFRS Foundation's IFRS Accounting Taxonomy page, which explains the elements used to tag IFRS statements and the updates to them, every quarter.
- For each filing regime the firm uses, record which taxonomy version the regulator currently requires, and where that requirement is published.
- When a new version is adopted, list the elements that affect the firm's common lines, and review the standard lines that clients' custom lines roll up to.
- Brief the staff who prepare tagged sets before the busy season, not halfway through it.
For the basics of what the taxonomy is and how a figure comes to carry a tag, see the IFRS Accounting Taxonomy and tagging.
A taxonomy is a living dictionary. Firms that treat it as fixed find out at filing time. Firms with a named owner and a quarterly check find out when the consultation opens, which is when there is still time to prepare.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
