DiFin Reporting starts next month
As referenced in last week’s newsletter, Germany’s banks and credit institutions have banded together with the government and XBRL Germany to develop an SME credit reporting system that leverages existing capabilities to generate XBRL financial statements for tax reporting. It’s called the DiFin system.
DiFin offers a secure web services-based gateway. It also provides some specific legal protections for tax advisors and accountants that prepare clients’ financial statements in XBRL format for consumption by banks and other credit institutions. It is hoped that this voluntary arrangement will provide benefits for companies and the finance sector alike. The DiFin system is more centralised than the Netherlands SBRBanken initiative, but shares significant characteristics. DiFin is the realisation of a vision expressed in the earliest days of XBRL Germany’s creation – congratulations to our colleagues there.
Wherever there is widespread private company financial statement or tax reporting in XBRL format (something that happens more and more today), it is natural and sensible that the private sector leverage these reporting capabilities. The goal is to lower costs and administrative burden for companies that need to finance their operations and to lower costs and risks (including, in the end, regulatory capital burden) for financial institutions. There’s more information here and here.