What is XBRL?
· XBRL stands for eXtensible Business Reporting Language.
· XBRL is a more advanced form of XML (Extensible Markup Language) based, computer-readable financial reporting language. (XML reporting is already being used by the Income-tax Department in India)
· It is used to express business (financial) reporting content.
· Instead of treating financial information as a block of text, XBRL provides a tag for each individual item of data – making it crunchable.
· XBRL, often referred to as “Interactive Data”, gives the financial community a standards-based method to prepare, publish, exchange, search, and analyse financial statements.
· This allows data to be treated intelligently.
What is the MCA mandate?
The companies whose Balance Sheet date is 31.03.2011 or onwards, need to file their financial statements in XBRL provided they qualify the criteria laid as per Ministry’s general Circular 37/2011 dated 07.06.2011.The following class of companies have to file the Financial Statements in XBRL Form from the year 2010-2011:-
· All companies listed in India and their subsidiaries (Subsidiary of listed company are required to file in XBRL format, irrespective of its paid up capital)
· All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above. i.e about 28,000 companies have to file in XBRL format.
NOTE: XBRL filing is mandatory for companies which fall in the above mentioned criteria. It is
optional for others.
There shall be a separate set of Form 23AC (Form for filing Balance Sheet and other documents with the Registrar) and Form 23ACA (Form for filing Profit & Loss Account and other documents with Registrar) available on the MCA portal for filing in XBRL form. Existing Form 23AC and 23ACA shall continue to be there for filing by companies to which XBRL filing is not applicable; and for filing of earlier year’s documents.
What needs to be filed?
The Documents to be filed under XBRL are as follows:
· Balance sheet and its schedules (existing Schedule VI)
· Profit Loss Account and its schedules (existing Schedule VI)
· Cash flow statement
· Notes to Accounts
· Auditor’s Report
· Director’s Report
· Company Information, signatures to balance sheet etc..
Steps involved in XBRL Filing:
Step 1: Creation of Instance Document using XBRL conversion tool or utility.
· Mapping and Tagging of financial statement element to a corresponding element in published taxonomy.
· Create the instance document.
· Review and verify the instance document.
Step 2: Downloading the XBRL Validation tool of MCA
There is a tool provided at the MCA portal for validating the generated XBRL instance document. Validating the instance document is a pre requisite before filing the balance sheet and profit & loss account on MCA portal.
Step 3: Validation of Instance Document using the tool.
Step 4: Perform Pre-scrutiny of the validated instance document through the tool.
Step 5: Attach validated and Pre-scrutinised instance document to Form 23AC and 23ACA
Step 6: Submit the forms to MCA portal
Conversion of Financial statements to XBRL instance documents
There are 3 options for converting your Annual Report into xbrl format – buying a tool, using an excel template and using a conversion service. The first tool expects you to have good working knowledge of xbrl and accountancy. The second option assumes that you have a good knowledge of accountancy, and a reasonable working knowledge of xbrl. The conversion service is a good option if you do not wish to learn xbrl for the current year.
Advantages of XBRL
· XBRL will improve the relevance and quality of financial analysis.
· Allows for quick and easy comparisons of data : Investors may use the tagged data in online databases to screen and compare companies data.
· Standardisation and reduced errors : Because computers can read information presented in an XBRL format, information can be transferred without being manually recaptured.
· Companies can benchmark : Listed companies can now benchmark themselves against their industries/sectors and peers far more easily and it’s easier to do globally since many companies see their peers as global companies.
· Multiple uses for data : Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort and used by various stakeholders.
· Lower cost to acquire information : Investment firms will be able to reduce costs through the use of
computer extraction without the need for translation or manual checking.
· Greater transparency can result in a lower cost of capital!
XBRL India – Key Terms you should know
· Schema
XBRL Schema stores information about taxonomy elements. Main purpose is to provide the computer with information on how it should represent and process accounting terms.
· Taxonomy : (Approx. 3200 line items/tags)
Taxonomy can be referred to as an electronic dictionary of the reporting concepts. Taxonomy consists of all the data definitions, the basic XBRL properties and the interrelationships amongst the concepts. Taxonomies may represent hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships among them. Currently the taxonomy is predefined and no extensions are permitted.
· Tags
Individual elements within a taxonomy, e.g., net income.
· Instance Document
An XBRL-enabled document. XBRL Instances contain the reported data with their values and “contexts”. Instances must be linked to at least one taxonomy which define their contexts, labels or references.
· Labels
If an element already exists within the standard taxonomy that can be used to represent your information but you do not like the standard label, do not add an additional element, just change the label.