DiFin Proves Popular
Earlier this year we reported on the launch of Germany’s Digital Financial Report system, DiFin, which leverages existing capabilities that exist in Germany to generate XBRL financial statements for tax reporting, to be reused in bank credit assessments.
DiFin is a voluntary system, offering a secure web-based services gateway, and 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.
Since launch in April of 2018 DiFin has had a rapid start, with over 2000 submissions being made by 25 September. More than 900 tax consultant firms are using the new nationwide standard for the electronic submission of annual financial statements.
These private companies are leveraging the reporting capabilities of XBRL, which has widespread use in Germany. Similar to the Dutch SBR Banken initiative, the DiFin effort is intended not just to lower the burden on companies seeking loans and lower the operating costs associated with bank credit assessment. Ultimately, widespread digital reporting of financial statements will enhance banks’ overall understanding of the risks that they face, allowing them to make fine-tuned capital allocation decisions that serve both their customers and their shareholders.
