The last date of XBRL filing for Phase – I Companies without additional fees ended on 31st December 2011. More than 85% of the companies covered in Phase –I (more than 23,000 companies) have filed the annual documents in XBRL mode.
Majority of the countries in the world have taken concrete steps in the direction of XBRL enabled filing. The need of XBRL is originated from the existing financial reporting requirements. The time and cost involved for compliance with Financial Reporting requirement is high for any company whether it is Large or small. During the year, the company provides various reports to different regulatory, banking agencies and also for internal MIS reporting. Each such report includes compiling, validating and releasing/uploading financial data. The different reporting formats and the pressure to meet the expectations of complying with the reporting requirements in the shortest possible span of time add to the challenges.
What is XBRL?
XBRL (eXtensible Business Reporting Language) is a freely available, market-driven, open, and global standard for exchanging business information. XBRL allows information modeling and the expression of semantic meaning commonly required in business reporting. XBRL is XML-based.
Instead of treating financial information as a block of text, as is the case with an HTML or a PDF file, XBRL provides a code or a “tag” for each item of data making it possible for the data to be treated “interactively” or “intelligently”.
XBRL is being developed by XBRL International (XII), an international non-profit consortium of approximately 650 major companies, organizations and government agencies. XBRL is a standards-based way to communicate and exchange business information between business systems. XBRL is easily expandable, so companies and other organizations can adopt it to meet a variety of requirements – hence the word ‘eXtensible’.
To put it simply, XBRL can be treated as analogous to a bar code in a department store product.
Barcode contains information for each product like Item Name, Item Code, Price, specific discount, manufacturing date, expiry date etc. In the same manner, XBRL tags each individual piece of information for the financial elements
There are mainly two types of XBRL Documents – Taxonomy and Instance Document. Taxonomy contains description and classification of business and financial terms, while the instance document is made up of the actual facts and figures. Taxonomy and Instance document together make up the XBRL documents. There are 3187 elements in Taxonomy issued by MCA while US GAAP Taxonomy contains more than 18000 elements.
An XBRL instance document is a business report in an electronic format created according to the rules of XBRL. It contains facts that are defined by the elements in the taxonomy it refers to, together with their values and an explanation of the context in which they are placed. It is a final document or end result of XBRL Conversion with the use of taxonomy and financial report of the company.
Applicability of XBRL in India
Ministry of Corporate Affairs (MCA) has come out with a circular mandating certain class of companies to file balance sheets and profit and loss account for the year 2010-11 onwards by using XBRL taxonomy. As per the circular, the following class of companies have to file the Financial Statements in XBRL Form only from the year 2010-2011:
(i) All companies listed inIndiaand their subsidiaries;
(ii) All companies having a paid up capital of Rs. 5 crore and above or
(iii) All companies having a Turnover of Rs. 100 crore and above,
excluding banking companies, insurance companies, Non-Banking Financial Companies.
A committee has been formed by MCA to develop the roadmap for future implementation of XBRL. Based on the experience of XBRL filing for the year 2010-11, the committee will propose phase wise implementation for class of companies and various reports to be filed in XBRL from the year 2011-12 onwards.
We are still awaiting for announcement from Ministry of Corporate Affairs on applicability of XBRL filing and level of tagging required for the year 2011-12. Let’s hope to receive by June end so that the corporates and professional could get sufficient time to comply with the requirement.