Who has to do it this year?
The following class of companies has to file the Financial Statements in XBRL Form only from the year 2010-2011:-
(i) All companies listed in India and their subsidiaries, including overseas subsidiaries;
(ii) All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above .
Who can sign it?
First the government said that only statutory auditor can sign it but now by a notification it is cleared that any CA,CS or CWA can sign the filing of reports in XBRL format.
Is this some rocket science??
The answer to this question is a big “NO”. XBRL just like xml is a reporting language, ie eXtensive Business Reporting language. XBRL tool is developed by XBRL international ,a nonprofit consortium of around 650 major companies.
XBRL is like coding a document like we have a barcode for every product . It is coded for protecting it from unauthorized changes. Just like a barcode provides information like Product name, MRP, expiry date similarly XBRL tags will provide following information-:
• Entity name
• Period of accounts
• Accounting reference ( Companies act , schedule VI)
• Scale factor (Value reported as actual or in thousands, lacs)
• Unit (INR, USD, GBP)
Benefits of XBRL-:
• With information given n specific format MCA department can generate watevr reports it needs.
• As for every data there are specific tags given we can convert name according to different countries , like Rs 2 lac is tagged in for net profit before tax in India , once we convert the language the tag name will change to 税前净pofit which is net profit before tax for Chinese. This will allow investors o easily understand the financial statements of any company as all will be reporting a similar information
• If we give our loan applications in XBRL format the charges are less as banks don’t have to take much pain in making reports they need.
• It allows businss information to be reused and repurposed. A business report created once can be used to create many documents in different formats with no loss of accuracy or integrity.
• XBRL enhances ability to compare information.
• XBRL allows unique reporting situations.
• And with XBRL in use in next 5 years we can expect single reporting for income tax and MCA.
Now what is XBRL Taxonomy??
If you are thinking its related to tax you are absolutely wrong. Taxonomy is nothing to do with tax its just a science of classification. Taxonomy is a format in which information is to be entered. Like for some words Inida has its own Oxford dictionary similarly every country has its own taxonomy for XBRL reporting. In india banking, Insurance and power sector have different kind of reporting as compared to all other companies, That’s the reason they have been exempt from XBRL reporting this year. Government is developing different customized taxonomies for those companies also.
Taxonomy for banking companies is already here and this year mutual fund companies can voluntarily file in XBRL, their taxonomies are also ready.
Taxonomy is made of 2 things Schema and linkbases
SCHEMA-: Dictionary of business and financial term along with XBRL properties.
LINKBASES-: Interrelationship among terms defined.
What is an instance document?
After taxonomy this is second main section in XBRL. As against taxonomy which has only definition and references, instance documents have actual values. It is generated by mapping the line items of documents to be reported with the taxonomy elements. Mapping is done through XBRL tool.
Cration of instance doc involves the following steps-:
• Mapping the line items of the documents to be filed viz balance sheet, P/L account to most appropriate taxonomy elements.
• Validation of the line items so mapped on the basis of validation rules in place built I the taxonomy through its link basis.
Extensions in taxonomy?
This year no extensions are allowed if you don’t have place to fill a amount then put it in most appropriate head using your judgment and give a note in lace provided. From next year extensions may also be allowed. Extensions in taxonomy means
• Modification in existing relationships
• Addition of new elements in taxonomy
• Combination of both of above
What compliances a CA has to do?
XBRL creator software being little costlier will not be feasible to buy for every CA firm. There are many vendors given on site of MCA who can do it for you. This year list of vendors is given on following linkhttp://www.mca.gov.in/XBRL/XBRL_Software_Training.html
While deciding a vendor please ensure about its after sale services and till what stage it will be serving you.
For other FAQ’s visit http://www.mca.gov.in/XBRL/faq_index.html
Rules for data entryhttp://www.mca.gov.in/XBRL/pdf/Final_Business_Rules.zip
Steps for filing financial statements in XBRL form in MCA21 system
Step 1 – Creation of XBRL instance document:
A. Map Company’s each financial statement element to a corresponding element in published taxonomy.
The first step in creation of an instance document is to do tagging of the XBRL taxonomy elements with the various accounting heads in the books of accounts of the company. This would create the mapping of the taxonomy elements with the accounting heads so that the accounting information can be converted into XBRL form.
Mapping is the process of comparing the concepts in the financial statements to the elements in the published taxonomy, assigning a taxonomy element to each financial statement concept.
Selecting the appropriate elements for some financial statement elements may require a significant amount of judgment. For that reason those in the company who are most familiar with the financial statements should be involved in matching financial statements concepts to taxonomy elements. The mapping should be reviewed before proceeding further as the complete reporting would be dependant on the mapping.
B. Create instance document for Balance sheet and Profit and loss Account-
Once the tagging of financial statement elements with the published taxonomy elements is done, the next step is to create the instance document. An instance document is a XML file that contains business reporting information and represents a collection of financial facts and report-specific information using tags from the XBRL taxonomy.
Separate instance documents need to be created for the following:
(i) Stand Alone Balance sheet of the company
(ii) Stand Alone Profit and Loss Account of the company
(iii) Consolidated Balance sheet of the company
(iv) Consolidated Profit and Loss Account of the company
The instance document should contain the financial information for both the current as well as the previous financial year.
Consolidated balance sheet and Profit and Loss instance documents to be created only in case the same is applicable to the company.
The following are the specifications to be followed while preparing the instance document –
• An XBRL instance document must be schema valid according to all schemas in the DTS
• The scheme element in the context must be
The value of identity element in the context must all be x-equal and must be the CIN of the company.
• An XBRL instance document must be schema valid according to all schemas in the DTS
• The scheme element in the context must be http://www.mca.gov.in/CIN
The value of identity element in the context must all be x-equal and must be the CIN of the company.
• Context must not have segment or scenario element present
• An instance must not contain duplicate xbrli:context elements.
• Every xbrli:context element must appear in at least one contextRef attribute in the same instance.
• An instance must not have more than one fact having the same element name and equal contextRef attributes
• All monetary facts must have the same unitRef attribute.
• The facts corresponding to a single concept must not have contextRef attributes pointing to contexts with overlapping time period. In case of periodType=”instant”, it means to have same date, and in case of periodType=”duration”, it means to have a duration that overlap.
It should be noted that all the above XBRL instance documentation can be done by using various XBRL tools/soft wares, and there is no need of XBRL programming or technical knowledge.
MCA also advised for taking professional services for XBRL instance document creation, if needed.
C. Review and verify the instance document
Once the instance document is prepared, it needs to be ensured that the instance document is a valid instance document and all the information has been correctly captured in the instance document.
Step 2 – Download XBRL validation tool from MCA portal
There shall be 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. You are required to download the tool from the MCA website and validate the instance document before uploading. There shall also be a facility to view and search the taxonomy.
Step 3 – Use the tool to validate the instance document
Once the tool has been downloaded, the next step is to validate the instance document. The following validations shall be performed by the tool-
• Validating that the instance document is as per the latest and correct version of taxonomy prescribed by MCA
• All mandatory elements have been entered
• Other validations as per taxonomy
Step 4: Perform pre-scrutiny of the validated instance document through the tool
Once the instance document is successfully validated from the tool, the next step is to pre-scrutinise the validated instance document with the help of the same tool. For pre-scrutinizing the instance document, a working internet connection shall be required. In the Pre-scrutiny, the server side validations (i.e. validations which are to be validated from the MCA21 system) shall be performed.
Also, there shall be a feature provided in the tool to verify the appearance of the generated XBRL instance document using the built in Viewer. It is imperative that the company should use this feature to verify the accuracy of the instance document.
Step 5: Attach instance document to the Form 23AC and Form 23ACA
There shall be a separate set of Form 23AC and Form 23ACA available on the MCA portal for filing in XBRL form. First fill up the Form 23AC and Form 23ACA. Thereafter, attach the validated and pre-scrutinised instance document for Balance sheet to Form 23AC. Similarly, the instance document for Profit and Loss account is to be attached to Form 23ACA. Separate instance documents need to be attached w.r.t. Standalone financial statements and consolidated financial statements.
Step 6: Submitting the Form 23ACA and Form 23ACA on the MCA portal
After the forms are filled, you are required to perform pre-scrutiny of the form, sign the form and then upload the same as per the normal eForm filing process. It shall be validated that the attached instance documents are validated and pre-scrutinised from the XBRL validation tool.
Viewing of balance sheet and profit and loss submitted in XBRL form on MCA portal:
The XBRL instance documents submitted along with Form 23AC and 23ACA are in machine readable format. Therefore, for viewing the same in a human readable format, these shall be converted into human readable format by the MCA21 system. For viewing the same on MCA21 portal and for taking certified copies of the same, these converted documents shall be made available.
