Navneet K Arora & Co. | XBRL Data Conversion Services
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XBRL Data Conversion Services

   

As per Ministry of Corporate Affairs’ General Circular No: 37/2011 dated 07.06.2011 (i) all listed companies and their Indian subsidiaries, (ii) all companies having a paid up capital of Rs 5 Crore or more, and (iii)  all companies having a turnover of Rs 100 Crore or above are mandated for compulsory XBRL filing. However banking companies, insurance companies, power companies and non-banking finance companies are exempted from XBRL filing till further orders.

Services provided by Us:

  • Mapping up financial statements with XBRL tags
  • Validation for tags and appropriate calculations
  • Creation of XBRL instance document in XML format for e filling
  • Creation of extended taxonomy as necessary
  • Provision of a “highlight” report to facilitate review and provide concurrence on:
  • Tagging decisions that require concurrence
  • Labels added that require concurrence
  • Rendering of XBRL instance document in readable form.
  • E-fiiling XBRL data with respective  Regulatory Authorities viz MCA, SEBI, Stock Exchanges, RBI, Mutual Fund Associations etc.

XBRL – AN OVERVIEW

Introduction

eXtensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data revolutionizing business reporting around the world. XBRL is a member of the family of computer languages based on XML (Extensible Markup Language), which is a standard for the electronic exchange of data between businesses and on the internet. Under XML, identifying tags are applied to items of data so that they can be processed efficiently by computer software.

It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

Origin

XBRL is being developed by XBRL International, an international non-profit consortium of approximately 450 major companies, organizations and government agencies working together to build the XBRL language and promote and support its adoption. This collaborative effort began in 1998 and has produced a variety of specifications and taxonomies to support the goal of providing a standard, XML-based language for digitizing business reports in accordance with the rules of accounting in each country or with other reporting regimes such as banking regulation or performance benchmarking.

Concept

As a concept, XBRL enables various systems and software to exchange business information using common, standardized, universal terminology. Instead of treating financial information as a block of text as in a standard internet page or a printed document – it provides an identifying tag for each individual item of data. This is computer readable.

It is a technical supply chain standard for moving financial and business reporting information into an interactive, comparable, intelligent, machine-readable information format. XBRL takes financial and business reporting frameworks developed by regulatory agencies and other financial and business reporting stakeholders and tag that data to an agreed upon XBRL taxonomies (classification) which then turns this information into intelligent information that can be consumed and understood by machines.

Meaning of Taxonomy

Taxonomies are the reporting-area specific hierarchical dictionaries used by the XBRL community. Specific tags are coined for each item and their attributes and interrelationships are defined. Different taxonomies are required for different business reporting purposes. Some national jurisdictions may need their own reporting taxonomies to reflect local accounting and other reporting regulations. Many organisations, including regulators, specific industries or even companies, may require taxonomies or taxonomy extensions to cover their own specific business reporting needs. In the Indian context for example XBRL India has developed draft General Purpose Financial reporting XBRL taxonomy for Commercial and Industrial Companies.

Example of ‘Tag’ in XBRL Taxonomies

Company’s net profit has its own unique tag. Computers can treat XBRL data “intelligently”: they can recognise the information in a XBRL document, select it, analyze it, store it, exchange it with other computers and present it automatically in a variety of ways for users. XBRL greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.

Application of XBRL

XBRL can be applied to a wide range of business and financial data. Among others it can handle

  • Company internal and external financial reporting.
  • Business reporting to all types of regulators, including tax and financial authorities, central banks and governments.
  • Filing of loan reports and applications; credit risk assessments.
  • Exchange of information between government departments or between other institutions, such as central banks.
  • Authorative accounting literature – providing a standard way of describing accounting documents provided by authoritative bodies.
  • A wide range of other financial and statistical data which needs to be stored, exchanged and analyzed.

XBRL in India

XBRL India is the Indian Jurisdiction of XBRL International. Its main objective is to promote and encourage the adoption of XBRL in India as the standard for electronic business reporting in India. Members of XBRL India among others include regulators such as Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA), Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), stock exchanges like Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), and some private sector companies.

Some Regulatory Initiatives

  • RBI’s initiatives

The Reserve Bank of India has already launched the Basel II reporting system using eXtensible Business Reporting Language (XBRL) through the existing Online Returns Filing System. With a view to providing direction for implementation of XBRL, RBI had set up a high level Steering Committee to develop and test the XBRL based reporting format.

  • SEBI initiatives

Some of the significant developments which have since taken place in Indian securities market with the encouragement of SEBI include setting up of a XBRL enabled platform for corporate reporting (www.corpfiling.co.in) by BSE and NSE. Both these have migrated to XBRL from the paper based model and offer a unified electronic platform, popularly known as ‘CorpFiling’ system, which enables the companies listed in either or both of the exchanges to electronically file their disclosures.

  • An example of XBRL application in Industry

Infosys Technologies Limited

Infosys Technologies Limited voluntarily furnished eXtensible Buisness Reporting Language (XBRL) data to the United States Securities and Exchange Commission electronically in a 6-k exhibit (A monthly report of foreign private issuer with SEC) way back on May 2005. It was also participating in SEC’s voluntary program for Reporting Financial Information on EDGAR using XBRL.

Steps Involved in Filling of Accounts in XBRL:

Step 1 – Mapping, Creation, Review & Verification of XBRL instance document

Step 2 – Download XBRL validation tool from MCA Portal

Step 3 – Validate the instance document by using the validation tool

Step 4 – Pre-scrutinize the validated instance tool

Step 5 – Attach instance document with Annual filling forms

XBRL-IFRS Taxonomy

International Accounting Standards Board published IFRS taxonomy 2009 which is a complete translation of IFRS into XBRL language. In February 2010, it has also published an exposure draft of IFRS taxonomy for Small and Medium Enterprises in XBRL for public comments.

What is XBRL?

eXtensible Business Reporting Language (XBRL) is an emerging technology standard, which promises to bring “better, faster, cheaper” data to organizational decision-making, and specifically to business and financial reporting.

XBRL provides a computer-readable tag to identify each individual item of data, whereby, a business reporting document becomes “intelligent” data, allowing the exchange of business reporting data by encoding the information in a meaningful way.

XBRL enables computer applications to recognize the information in an XBRL document – selecting, analyzing, storing, and exchanging it with other computers and present it in a variety of ways for users.

Benefits of XBRL

XBRL is:

  • An open technology standard for reporting and analyzing business and financial information
  • Software agnostic, or independent
  • Accounting framework neutral

XBRL is not:

  • A standardized chart of accounts
  • A way to require the reporting of specific information
  • A transaction level activity (although it can summarize general ledger transactions)

XBRL offers major benefits at all stages of business reporting and analysis by way of automation, cost saving, faster, more reliable and more accurate handling of data, which in turn helps in improved analysis and in better quality of information and decision-making.

XBRL enables users of financial data to switch resources away from costly manual processes, typically involving time consuming comparison, assembly and re-entry of data. They are able to concentrate effort on analysis, aided by software which can validate and manipulate XBRL information. For example, information search which would otherwise have taken hours can be completed with XBRL before one blinks his eye.

Governments, regulators, economic agencies, stock exchanges, financial information companies, those who produce or use it, including accountants, auditors, company managers, financial analysts, investors and creditors, etc. stand to benefit from the use of XBRL. Accountancy software vendors, the financial services industry, investor relations companies and the information technology industry – all have a huge business opportunity to develop XBRL compliant packages.

The following table gives a bird’s eye view of the benefits that different stakeholders would derive out of XBRL:

Steps involved in implementing the XBRL project

  • define requirements towards future reporting platform
  • analyze them regarding their fulfillment when XBRL is used
  • what are the driving forces of XBRL implementation
  • changes in legal regulations
  • technical issues
  • international adoption

Conclusion

When it comes to XBRL, much is still unknown. This is true not only at the individual accounting and finance professional level, but also among the very regulators who are leading this call to action. Regardless of the many variables involved, implementation is becoming inevitable. Rather than being reactive and scrambling once mandated, forward-looking and strategic finance executives and organizations will take proactive steps to ensure their employees are ready to implement the most time- and cost-effective implementation possible.