Development and Implementation of XBRL in India

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Rhapsody Accounting and Advisory Services Private Limited (RAAS or Rhapsody) was formed primarily to cater to first the Indian and eventually to the I,
Rhapsody Accounting and Advisory Services Private Limited (RAAS or Rhapsody) was formed primarily to cater to first the Indian and eventually to the I

Development and Implementation of XBRL in India

Posted On : Aug-22-2011 | seen (901) times | Article Word Count : 853 |

Professionals mostly Financial professionals were reeling under the IFRS/ IND AS giant in India and wondering what Ministry of Corporate Affairs (MCA) is up to i.e. whether IFRS/IND AS will see the light of the day this year or not and Bang – MCA releases a circular with the following subject – 'Subject: Filing of Balance Sheet and Profit and Loss Account in eXtensible Business Reporting Language (XBRL) mode'. And then the first paragraph read as follows:

'It has been decided by the Ministry of Corporate Affairs to mandate certain class of companies to file balance sheets and profit and loss account for the year 2010-11 onwards by using XBRL taxonomy. The Financial Statements required to be filed in XBRL format would be based upon the Taxonomy on XBRL developed for the existing Schedule VI, as per the existing, (non converged) Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. The said Taxonomy is being hosted on the website of the Ministry at mca.gov.in shortly. The Frequently Asked Questions (FAQs) about XBRL in India have been framed by the Ministry and they are being annexed as Annexure I with this circular for the information and easy understanding of the stakeholders.

Immediately after that, MCA released exposure draft of Taxonomy

Now, some people both consultants and Corporates, who were still recovering from IFRS/IND AS did not react. Some started reading something about XBRL with a part surprise and part inquisitiveness mind set. Some as usual with a very sceptical mindset did not react and concluded that 'this is not likely to come or happen', sometimes one wonders if being a professional in India means no change!

It was almost end April 2011, when people started realizing that XBRL seems to be a reality and there is a lot of action happening on the development of application front etc. Then there were a series of circulars and press releases by MCA as well as major seminars on a national level.

The basic summary of these circulars as the situation stands today is as follows:

1. Companies whose year ended on 31 March 2011 need to file their financial and other information in the XBRL mode
2. The conversion to XBRL mode for filing shall be done in phases
3. In the first phase the Companies which need to file in the XBRL mode will be all listed Companies and all their Indian Subsidiaries, If not listed then if the paid up capital is more than Rs. 5 crore or if the turnover is more than Rs. 100 crores.
4. Companies which are Banking Companies or NBFC's or Insurance Companies or Electricity Companies are exempt from filing in the current year.
5. What needs to be filed is Complete Balance sheet and its schedules, Profit and Loss and its schedules, Cash flow, Notes to Account, Auditors report and Directors report
6. The Companies can now file it by 30 November 2011 or later in a few cases without any late fees as in the routine these corporate filings get completed by 30 September or 31 October in a few cases.
7. The XBRL filing need to be certified by any practicing Chartered Accountant (CA), Company Secretary (CS) or Cost and Works Accountant (CWA) in India.

Now that people understood this and people started attending seminars or training programmes or workshops and started encountering words and terms like taxonomy, Business rules, schema, data types, attributes, context, concept, fact, tagging, validations, instance document, XML etc .

And suddenly people were trying to figure out as to whose responsibility is this XBRL filing of in this society. So is it the Chartered Accountant the Company Secretary, the CWA or the IT team or a combination of one or more.
Various people have different views, but basically the entire process simply put entails the following
1. The CFO/Director Finances and their teams will continue to be responsible for preparation of Annual Accounts
2. The Auditor will be continued to be responsible for the audit of the accounts etc under the Companies Act.
3. Additionally, someone within the system – The Finance team, the Company Secretary and his team or an external consultant will have to convert the relevant portions from the final audited and approved by AGM Annual accounts into XBRL mode
4. This conversion will necessarily have to be done using software or an application. Per MCA, this can either be purchased from a software vendor or developed within an organization
5. The converted XBRL output will have to be certified
6. The XBRL output also known as Instance document after MCA Validations and pre scrutiny shall be attached to Form 23 AC and Form 23 ACA as the case may be for the purpose of annual MCA filing.

Thus, in our view, people need to understand and appreciate the basic concepts and steps and appropriate XBRL Software / Application or an external consultant for outsourcing the entire tagging services or develop the conversion capabilities using a software or application, will do the trick. It is not necessary beyond a point for anyone to get accustomed to some of the complicated terms etc.

And anyone within the system CA, CS etc may take the initiative and lead in the entire XBRL process.
Simply put, only the mode of filing with Registrar of Companies (ROC) / MCA has changed and not any other process. It is true that, it might take some additional time in the first year. However, going forward the things will become streamlined and simple and routine for people to handle.

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<h1>Development and Implementation of XBRL in India</h1> Author: <a href='http://www.articleseen.com/profile_Rhapsody Accounting and Advisory Services Private .aspx'>Rhapsody Accounting and Advisory Services Private </a> 'It has been decided by the Ministry of Corporate Affairs to mandate certain class of companies to file balance sheets and profit and loss account for the year 2010-11 onwards by using XBRL taxonomy. The Financial Statements required to be filed in XBRL format would be based upon the Taxonomy on XBRL developed for the existing Schedule VI, as per the existing, (non converged) Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. The said Taxonomy is being hosted on the website of the Ministry at www.mca.gov.in shortly. The Frequently Asked Questions (FAQs) about XBRL in India have been framed by the Ministry and they are being annexed as Annexure I with this circular for the information and easy understanding of the stakeholders.

Immediately after that, MCA released exposure draft of Taxonomy

Now, some people both consultants and Corporates, who were still recovering from IFRS/IND AS did not react. Some started reading something about XBRL with a part surprise and part inquisitiveness mind set. Some as usual with a very sceptical mindset did not react and concluded that 'this is not likely to come or happen', sometimes one wonders if being a professional in India means no change!

It was almost end April 2011, when people started realizing that XBRL seems to be a reality and there is a lot of action happening on the development of application front etc. Then there were a series of circulars and press releases by MCA as well as major seminars on a national level.

The basic summary of these circulars as the situation stands today is as follows:
 
1.	Companies whose year ended on 31 March 2011 need to file their financial and other information in the XBRL mode
2.	The conversion to XBRL mode for filing shall be done in phases
3.	In the first phase the Companies which need to file in the XBRL mode will be all listed Companies and all their Indian Subsidiaries, If not listed then if the paid up capital is more than Rs. 5 crore or if the turnover is more than Rs. 100 crores.
4.	Companies which are Banking Companies or NBFC's or Insurance Companies or Electricity Companies are exempt from filing in the current year.
5.	What needs to be filed is Complete Balance sheet and its schedules, Profit and Loss and its schedules, Cash flow, Notes to Account, Auditors report and Directors report
6.	The Companies can now file it by 30 November 2011 or later in a few cases without any late fees as in the routine these corporate filings get completed by 30 September or 31 October in a few cases.
7.	The XBRL filing need to be certified by any practicing Chartered Accountant (CA), Company Secretary (CS) or Cost and Works Accountant (CWA) in India.
 
Now that people understood this and people started attending seminars or training programmes or workshops and started encountering words and terms like taxonomy, Business rules, schema, data types, attributes, context, concept, fact, tagging, validations, instance document, XML etc .

And suddenly people were trying to figure out as to whose responsibility is this XBRL filing of in this society. So is it the Chartered Accountant the Company Secretary, the CWA or the IT team or a combination of one or more.
Various people have different views, but basically the entire process simply put entails the following
1.	The CFO/Director Finances and their teams will continue to be responsible for preparation of Annual Accounts
2.	The Auditor will be continued to be responsible for the audit of the accounts etc under the Companies Act.
3.	Additionally, someone within the system – The Finance team, the Company Secretary and his team or an external consultant will have to convert the relevant portions from the final audited and approved by AGM Annual accounts into XBRL mode
4.	This conversion will necessarily have to be done using software or an application. Per MCA, this can either be purchased from a software vendor or developed within an organization
5.	The converted XBRL output will have to be certified
6.	The XBRL output also known as Instance document after MCA Validations and pre scrutiny shall be attached to Form 23 AC and Form 23 ACA as the case may be for the purpose of annual MCA filing.

Thus, in our view, people need to understand and appreciate the basic concepts and steps and appropriate XBRL Software / Application or an external consultant for outsourcing the entire tagging services or develop the conversion capabilities using a software or application, will do the trick. It is not necessary beyond a point for anyone to get accustomed to some of the complicated terms etc.

And anyone within the system CA, CS etc may take the initiative and lead in the entire XBRL process.
Simply put, only the mode of filing with Registrar of Companies (ROC) / MCA has changed and not any other process. It is true that, it might take some additional time in the first year. However, going forward the things will become streamlined and simple and routine for people to handle.
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 Article Source: <a href='http://www.articleseen.com/Article_Development-and-Implementation-of-XBRL-in-India_75709.aspx'> http://www.articleseen.com/Article_Development and Implementation of XBRL in India_75709.aspx</a>

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Rhapsody Accounting and Advisory Services (P) Ltd.

Corporate Office

A-109 , 1st Floor

Shivalik

Sector 35

Noida, UP - 201301

Phone:+91-0120-4235138

Mobile: +91-9810306995

Email:enquiry@rhapsody-services.com

Website:- http://www.rhapsody-services.com

Keywords : xbrl, xbrl filing, mca filing, xbrl software, xbrl application, xbrl tools, xbrl in india, xbrl download, xbrl certificate pr,

Category : Finance : Taxes

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