Hello everyone, in this post we are going to discuss on XBRL. We will also cover the following topics:
XBRL is a standardized International business language formulated by a non-profit consortium AICPA (American Institute of Certified Public Accountants).
It is an open language used for writing big digital business reports like financial statements, other kinds of compliance, performance as well as business reports.
XBRL also helps to transfer huge chunks of information with accuracy, readability and speed. Consequently, reducing cost, time and effort spent by the company.
Therefore, XBRL was introduced in India for companies to file standard balance sheets and profit and loss account by MCA (Ministry of Corporate Affairs) for ROC (Registrar Of Companies).
Accordingly, it also uses XBRL taxonomy and came into effect in the year 2010-11 onwards.
MCA’s XBRL Circular
The compulsory filing of Financial Statements (Balance Sheet, Profit, and Loss Account, Director’s Report, etc) in XBRL format is for:
- All Listed Companies and also their Indian Subsidiaries.
- All companies having paid-up capital of Rs. 5 crores and above.
- All companies having a turnover of Rs. 100 crore and above.
- All companies who need to file their financial statements for FY 2010-11, using XBRL mode.
However, Power Companies, Non-Banking Finance Companies, Insurance Companies, and Banking Companies are exempted from XBRL filing.
- So practicing courses like CA/CS/CWA to certify the authenticity of Balance Sheet, Profit, and Loss filed in XBRL format.
- Financial Statements were then tagged “fairly represents, in all material aspects, audited financial statements of the Company”.
Preparatory work for XBRL
- Get audited financial statements of the company (standalone and consolidated).
- The above statements should be in Excel or Word format.
- Then map the source document to the Target Taxonomy as directed by MCA.
Ensure the generated XBRL financial statement has the following:
- Completeness – all the information necessary is included in the XBRL statement.
- Mapping- the elements selected are, therefore connected with the meaning of the associated concepts in the source information.
- Accuracy – the amounts, dates, other attributes (for example, Monetary units), and relationships (order and calculations) in the instance document and related files have a logical connection with the source information in relation with the requirements of the entity’s reporting environment.
- XBRL filing is not only balance sheet and profit and loss. Each note also forms a part of the taxonomy that has to be looked into:
- Balance Sheet and Profit & Loss Account
- Cash Flow Statements
- Notes forming part of the accounts
- Director’s report
- Auditor’s report
- Working papers
- Details to be provided by shareholders:
- CIN/PAN of the shareholders with more than 5% shareholding.
- No. of shares held by them.
- Percentage of shareholding.
- Details of Application money received for allotment of securities and due for refund as well as its interest.
- Details about private placements(if any)
- Details of public offerings made during the year(if any) – This is a mandatory field.
- The nature of security in case of secured borrowings.
- Terms of repayment in long term borrowings.
- Details on defaults on borrowings(if any) like date of default, outstanding amount of default towards principal and interest.
- Details of bonds or debentures like nature, particulars of redemption, no of allottees etc.
- Disclose additional information.
- Use the depreciation method for each class of asset.
- Useful life or depreciation rates.
- Description of using higher rates of depreciation than the prescribed rates.
- Details on the revaluation of fixed assets.
Related party details
- Name of the related party, CIN (Corporate Identification Number) or PAN, country of incorporation or residence.
- Description of the nature of the related party.
- Related party transactions in detail.
- The transaction relating to key management personnel.
- Outstanding balances for related party details.
- Name of the Subsidiary, CIN (Corporate Identification Number) or PAN, their country of incorporation or residence.
- SRN of Balance sheet of Subsidiary.
- The Date of becoming subsidiary and Date of ceasing to be subsidiary(if any)
- Key information about subsidiary, for instance, Share capital, reserves, Revenue, Total profit etc.
- Details of guarantee given for any loans borrowed by subsidiary like Name of guaranteed party, CIN, amount.
- Details of guarantee by the subsidiary for loans borrowed by the company like Name of the guaranteed party, CIN, amount.
- Directors information like Name, DIN (Director Identification Number), Designation, Qualification, Date of Birth, Share held, Remuneration paid with break up).
- The qualification(s), reservation(s) or adverse remark(s) of the auditors as per Board’s report.
- Then a Complete Directors report.
Details of principal products or services
- Description of products or services category (with ITC code)
- Turnover of each product or services in each category.
- Highest turnover contributing to the product or service(with ITC code)
- Unit of measurement, Quantity, Turnover of highest turnover contributing to the product or service.
Scope and level of tagging
- The scope, as well as the level of tagging for preparation of financial statements in XBRL format, are based on the annual accounts and related documents of the company along with the business rules as published by MCA.
- Detailed tagging for the various elements in the taxonomy. E.g.: in the Notes – Share Capital
- Details of the Authorized Capital, Issued, Subscribed, Called up, Paid-up.
- Reconciliation of no.of shares and the value of shares outstanding.
- Shares in a company held by holding the company or ultimate holding company or by its subsidiaries or associates.
- Shareholders details.
- Text block tagging is also used in case of information like director’s report, notes to accounts etc., to highlight business rules.
Modelling via Axis
The C&I taxonomy also uses both ‘explicit’ and ‘typed’ dimensions.
Modelling through ‘Explicit’ dimensions
Explicit dimensions are used in cases where the no.of domain members are known and can be defined. For instance,
- Notes: Share Capital
- Notes: Reserves and Surplus
- Notes: Borrowings
- Notes: Tangible Assets
- Notes: Intangible Assets
Modelling through ‘Typed’ dimensions
Typed dimensions are used in cases where the no.of domain members are known but it is impractical to list due to their large no. Examples are below:
- Disclosure – Directors report
- Disclosures – Auditors Report
- Notes: Non-Current Investments
- Notes: Current Investments
- Notes: Related Party
- Notes: Subsidiary Information
- Disclosure of Principal Products or services
As per Section 259 of Companies Act, a private company has no limit on the maximum no. of directors that can be appointed. However, the public companies have a limit of twelve and it can be increased beyond twelve by permission of the central government.
Since the no.of directors for companies do not have a maximum limit so here ‘typed’ dimension is used. So, the preparer can create any no.of members as per their reporting entity’s requirement.
With that, we have come to the end of this post. Share your views and opinion with us in the comment section below.