Friday, 17 February 2012

A practical insight to XBRL Efiling


Introduction to XBRL
XBRL (Extensible Business Reporting Language) is another advanced reporting language of the XML family. XBRL ensures that the figures reported to government authorities and other organisation does not remain dormant piece of printed papers but these figures can be used in data analysis.
ICAI took initiative in 2001 for implementation of XBRL as a first step towards Digital data Reporting. Knowing the fact that it would take some time before it gets approval from the ministry. It took 10 yrs for the ministry of corporate affairs to release mandate for filing of annual accounts in XBRL format.
Though this fact must be iterated that the Reserve bank of India has already started  this reporting method for the Indian banks reporting , but nonetheless it was at very miniscule level.
What is 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)
(Note : If A ltd is Listed Company , B (P) Ltd is A’s Subsidiary and C (P) Ltd is B’s Subsidiary , then as per FAQ by MCA all three i.e. A Ltd , B (P) Ltd & C (P) Ltd have to file in XBRL Format only)
  • All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crores or above. I.e. about 28,000 companies have to file in XBRL format.
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.
Theoretical Aspects of XBRL – To be known before Filing
XBRL can be broadly understood in two separate aspects
  • Taxonomy
  • Instance Document
Taxonomy: In Simplest of words possible, I can define taxonomy as dictionary of accounting elements. This taxonomy is ideal set of elements available with the ministry against which the data of the filer has to be tagged. Revised Taxonomy as released by MCA contains precisely 3,174 elements.
Tagging mechanism will be a process in which the data on physical financial documents will be converted as per available taxonomy. For the purpose of this tagging, XBRL softwares are available in the market. Details can also be obtained from XBRL portal of MCA.
(Note: Taxonomy as released by MCA as of today is compliant with Indian AS and Existing Schedule VI to Companies Act, 1956. As and when IND – AS and Revised Schedule VI comes applicable, the same will be revised and hosted on MCA Portal)
Instance Document: Once the tagging process is complete, the document that will be generated will be a machine readable XBRL document , this document is called as Instance Document.
MCA Taxonomy
MCA Taxonomy contains majorly the following Parts :
  • Elements and their characteristics like the nature of field (text, numeric etc ) , the nature of their balances, period type etc . In totality there are 3,174 elements.
  • Extended Link Base – Extended link base are further groupings of elements and are in totality 57 in number.
  • Presentation Link Base – Detailing of Extended Link Base.
  • Calculations
  • Labels
Mapping Process – A Lucid step by Step process
Step 1
Map or tag the company’s financial statements to the published taxonomy. This can be done by following methods.
  • Certain  ERP systems may have inbuilt feature to tag the financials to the published taxonomy of MCA
  • XBRL Softwares.
Detailed list of software vendors can be obtained from http://www.mca.gov.in/XBRL.
It must be noted that MCA does not recommends/associates with these vendors. It has been hosted just for public Convenience.
This is by far the most important and technical step of the process and nearly constitutes 70 – 80 % of filing process. The Correctness of this mapping must be reviewed. Errors that creep in must be removed by professional judgement.
Step 2
Based on the Mapping above , create a instance document.
Separate Instance document must be created for :
  • Standalone Balance sheet
  • Standalone profit and loss account
  • Consolidated Balance sheet
  • Consolidated Profit and Loss Account
Step 3
Validate the created instance document.
The Validation tool of MCA will be shortly available on the MCA portal. This tool is to be downloaded.
Just as FVU validation or others, the instance document created should be validated from this validation tool.
Checks performed by this validation tool are as below :
  • Correct version of taxonomy used ?
  • Taxonomy elements fully recuperated ?
  • Compliance with Business Rules ?
  • Vis a Vis MCA – 21 Database ?
A Secure key lock will be put on Instance Document once the Validation is done correctly.
Step 4
File the Instance Document.
Instance document created and validated as above shall be attached to Form 23AC and Form 23ACA ( Seperate class of XBRL forms will be hosted by MCA for XBRL purpose.)
Note
Instance Document is not required to be digitally signed. Only E-form 23AC and 23ACA are required to be digitally signed by practicing professional.
For any other Query/ Opinion:
About the Author
The Author Mr. Ankit Jain (Gulgulia) is a Practising Chartered Accountant in New Delhi. Specialising in Indirect Taxes, Corporate Laws & Assurance. You Can Contact him at Ankitgulgulia@gmail.com Or +919811653975.
Courtesy:Taxguru