Overview

XBRL means extensible Business Reporting Language.XBRL is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information.

Applicability

As under section 137 of the Companies Act, 2013 using the Extensible Business Reporting Language (XBRL) taxonomy for financial year commencing on or after 1st April, 2014 is mandatory on

• All companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or.
• All companies having paid up capital of Rupees five crore and above; or.
• All companies having turnover of Rupees one hundred crores and above; or.
• All companies which were hitherto covered under the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011:

Exemption

• Companies in Banking, Insurance
• Power Sector
• Non-Banking Financial Companies

Checklist

• Check whether the company falls under the XBRL Limit.
• Install the XBRL Software from XBRL Software vendor. The parent system is regarded as the main system and other systems will be considered as the client systems.
• Check active net connection in the main system as well as client systems.
• Create the user id and password for the Company.
• Feed all the relevant data on the XBRL generated Company. The details of the company contains financial tagging, Fixed Asset tagging and non financial tagging.
• Once the details have been filled, check the errors generated.
• Eliminate the errors to 0.
• Generate the XML file of the Company that is instance document.
• Download the C&I taxonomy from MCA Portal.
• Validate the XML document using MCA XBRL validation tool V2.0.4 available on MCA21 portal.
• Generate the Pdf of the same XML document.
• Attach the Pdf file as attachment in the annual filing form AOC-4 (XBRL).
• Upload the form on MCA Site.

Documents Required

The company or the applicant would have to provide the following documents for XBRL filing:

• Balance sheet of the Company
• Annual Returns of the Company
• Profit and Loss Account of the Company
• Notes and information relating to any accounts of the company
• Audited Reports
• Any other Information as requested by the authority

How will Servzone help you?

Benefits

What are the benefits to a company from putting its financial statements into XBRL?

XBRL increases the usability of financial statement information. The need to re-key financial data for analytical and other purposes can be eliminated. By presenting its statements in XBRL, a company can benefit investors and raise its profile. It will also meet the requirements of regulators, lenders and others consumers of financial information, who are increasingly demanding reporting in XBRL. This will improve business relations and lead to a range of benefits.

With full adoption of XBRL, companies can automate data collection. For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently. Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy.

Whether XBRL software has to be purchased from separate vendors and then installed in our computers or MCA itself will provide us with the software?

XBRL instance document creation software has to be purchased from the software vendors in the market. This software is used to create XBRL instance documents that would be uploaded on the MCA portal. Stakeholders may check whether the software is compliant with the Business Rules published by the MCA. MCA will provide a Validation Tool to provide a facility for validation of the instance document and filing of the same on the MCA Website.

Does XBRL benefit the comparability of financial statements?

XBRL benefits comparability by helping to identify data which is genuinely alike and distinguishing information which is not comparable.

The following benefits can be achieved by a company through XBRL filing:

Cost Saving-

A company can save costs. Before XBRL filing came into picture, companies which are listed in stock exchanges would have to go for the process of physical filing. This will usually take lot of time and effort if an applicant or company has to go for the physical process of filing. Through this system of filing the applicant can take the benefits of online system and speed up the process of filing.

Data Collection-

Data collection through advanced systems and automation processes can be conducted quickly. For example, if a company has different form of subsidiaries, data from the same can be collected quickly, assembled and processed by the company. Through this system, different reports and subsets can be created in a quick and efficient manner.

Report Analysis-

The performance analysis of the reporting system can also be achieved through the system of XBRL reporting. Such standards would not be possible through other systems of reporting. The data which is collected and consumed can be analysed through such system of XBRL filing.

Helps in Decision Making-

Using such software would cut costs and not waste time. The reports would be produced effectively. Time sheets, balance sheet, and information on the amount of tax would also be present through this system. Such reports would directly reduce the amount of effort put in the process of decision making. Any company utilizing this system would secure the benefits.

Data Consumption-

Through such processes of XBRL filing, data consumption can be seen by the company. Accuracy can be achieved through this system, and such software can reduce the amount of error in such systems.

No Human Error-

By utilising this system, the chances of human error is null, as most of the system works on automation and data. There is less amount of human effort in this system. Human effort can be spent on more productive areas to increase the resources in the firm.