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Index Blue Consulting Pvt. Ltd.2 Index www.xbrlconsulting.co.in Page No. 1. XBRL in India 3-4 2. MCA’s mandate 5-6 3. Chronological order of developments 7 4. Common terms 8-11 5. Tagging requirement 12 6. Process flow 13 7. Skill set required for conversion 14-15 8. How to select a service provider? 16-23 9. Interesting facts about XBRL 24-25 10. Contact detail 26
1. XBRL in India Blue Consulting Pvt. Ltd.3 Index www.xbrlconsulting.co.in In India, the Reserve Bank of India (RBI) has already implemented (since Oct 2008) XBRL-based reporting for three returns: capital adequacy data as per Basel II norms, Form A and the GPB Return by banks. Further, it is mandatory for top 100 listed companies in India to report their quarterly results etc. to BSE & NSE in XBRL. It is called Corpfiling.
…contd.(XBRL in India) Blue Consulting Pvt. Ltd.4 Index www.xbrlconsulting.co.in Now, it’s MCA’s turn to implement it on a wider canvas. In the 1st phase, around 30,000 companies in India need to report to the MCA in XBRL this year. Going ahead, (from FY 2012-13) it is expected that almost 9 lakh companies would need to report in XBRL in the next three years.
2. MCA mandate Blue Consulting Pvt. Ltd.5 Index www.xbrlconsulting.co.in Ministry of Corporate Affairs (MCA) has mandated financial reporting in XBRL from the Financial Year 2010-2011 for : all listed companies and their subsidiaries (excluding overseas subsidiaries), all unlisted companies having paid up capital of Rs. 5 Crore and above All unlisted companies having a turnover of Rs. 100 Crore or above
…contd.(MCA mandate ) Blue Consulting Pvt. Ltd.6 Index www.xbrlconsulting.co.in The companies listed above are permitted to file XBRL compliant documents up to 30.11.2011 or with in 60 days of their due date, whichever is later without any additional filing fee. The current mandate excludes banking companies, insurance companies, power companies and Non Banking Financial Companies (NBFCs).
3. Chronological order of XBRL developments Blue Consulting Pvt. Ltd.7 Index www.xbrlconsulting.co.in 31st March 23rd May MCA came out with its MCA released 1 First Notification on 2 1st version of XBRL Taxonomy 28th July 27th Aug Extension of due date MCA released 3 of filing from 30th Sep 4 UPDATED to 30th Nov Taxonomy 1st Oct 5th Oct5 Release of XBRL Forms for Validation Tool 6 13th Oct filing issued MCA released the 14th Oct 7 list of XBRL software REVISED vendors and service providers 8 Validation Tool released
4. Common terms Blue Consulting Pvt. Ltd.8 Index www.xbrlconsulting.co.in Taxonomy Generally speaking, taxonomy means a catalogue or set of rules for classification; in XBRL, taxonomy can be referred to as an electronic dictionary of the reporting concepts containing computer-readable definitions of business reporting terms, as well relationships between them and links connecting them to resources.
…contd. (Common terms) Blue Consulting Pvt. Ltd.9 Index www.xbrlconsulting.co.in Elements An element is a business or a financial concept which is defined in the taxonomy according to XBRL specifications. Each element has a type, is identified by name and may have a set of attribute specifications as per the XBRL standards. There are 3187 elements in the revised taxonomy issued by MCA. Business rules There are approx. 350 business rules which incorporate the checks for minimum tagging requirements.
…contd. (Common terms) Blue Consulting Pvt. Ltd.10 Index www.xbrlconsulting.co.in Tagging The process of assigning tags (referred to as elements in taxonomy) from the taxonomy to the company specific reporting concepts is called tagging. Tagging requires appropriate selection of elements from the taxonomy based on attributes, documentation and relationships with other elements.
…contd. (Common terms) Blue Consulting Pvt. Ltd.11 Index www.xbrlconsulting.co.in Instance documents The final output, which is converted in XBRL format, is called instance document. Two instance documents are generated, Balance Sheet and Income Statement (Profit & Loss a/c). A company with subsidiary companies, needs to generate two sets of instance documents, i.e., one on a standalone basis and another on a consolidated basis.
5. Tagging requirement Blue Consulting Pvt. Ltd.12 Index www.xbrlconsulting.co.in Detailed tagging Balance sheet and its schedules Profit and loss a/c and its Text Block tagging schedules Director’s report Cash flow statement Auditor’s report Related party transactions (party Notes to accounts wise) Segment reporting Subsidiary and Holding company information Note: Associates and Joint Ventures From our experience, detailed tagging takes approx. 90% of total tagging time
6. Process flow of conversion Blue Consulting Pvt. Ltd.13 Index www.xbrlconsulting.co.in Client Client provides soft copy of Annual Report of FY 2010-11 XBRL Service Analysis of Mapping and Review and XBRL instance Provider Annual Report tagging validation document Client Review and upload of XBRL documents to MCA website
7. Skills required for conversion Blue Consulting Pvt. Ltd.14 Index www.xbrlconsulting.co.in To convert Financial Statements in XBRL format, one needs to have a good understanding of Financial Statements and Business Rules defined for Taxonomy. Software is just an enabler and plays less than 25% part in whole conversion process. Every company has its own set of peculiarities in the Financial Statements and a service provider should be proficient in Indian GAAP’s to understand the Financial Statements.
…contd.(Skill set for conversion?) Blue Consulting Pvt. Ltd.15 Index www.xbrlconsulting.co.in The quality of tagging (i.e., choosing a particular tag) plays an important role in making a tagged Financial Statements useful for analysis. However, this area is normally overlooked by clients while engaging any service provider for conversion service. The most problematic information to be tagged is Profit and Loss a/c as there is no specified format in Schedule VI and every company follows it’s own format.
#1. Experience Blue Consulting Pvt. Ltd.17 Index www.xbrlconsulting.co.in Ask prospective service providers about their experience in handling of Financial Statements across various industries. Ask about the number of years of experience in Finance and Accounts, Financial Reporting; training in XBRL; total team size; The nature of services provided by the service provider can be a good indication about its knowledge of Financial Statements.
#2. XBRL conversion process Blue Consulting Pvt. Ltd.18 Index www.xbrlconsulting.co.in Ask potential XBRL service providers about their XBRL conversion process. What inputs shall be required from the client and at what stages? The amount of additional information required for accurate conversion and filing varies from company to company; it could include information other than that provided in the Annual Report of the company.
…contd.( XBRL conversion process) Blue Consulting Pvt. Ltd.19 Index www.xbrlconsulting.co.in Normally, a service provider should be able to ascertain and evaluate the requirement for additional information within one working day from the receipt of the Annual Report. If not, you may want to reconsider your selection.
#3. XBRL team Blue Consulting Pvt. Ltd.20 Index www.xbrlconsulting.co.in Enquire about the following from a prospective service provider’s : No. of people in XBRL team Their qualifications Do they have prior experience on the XBRL conversion process Is there a separate team or person for review of tagging quality? This information will help you to assess whether a particular service provider can handle volumes or not.
#4. Clients or References Blue Consulting Pvt. Ltd.21 Index www.xbrlconsulting.co.in Ask about the service providers’ existing client list. Ask for at least two reference for whom the service provider has converted financial reports into XBRL. One phone call can provide you an assurance about the competence and quality of an XBRL service provider.
#5. Confidentiality of information Blue Consulting Pvt. Ltd.22 Index www.xbrlconsulting.co.in A client should enquire about the data handling process at service the provider’s office. Does the service provider have a policy of signing a confidentiality agreement or an NDA (non-disclosure agreement)? Even if there is no policy or practice of signing NDA, you must insist on signing an NDA prior to data conversion. This secures confidentiality and is in line with best practices, globally.
Some further questions ! Blue Consulting Pvt. Ltd.23 Index www.xbrlconsulting.co.in Can someone there help with tagging questions specific to my industry? Where is the help/support team located precisely? What are the support hours? Who will be in charge of my filing? How will I defend this choice if something goes very wrong? Do I trust these people with my companys good standing with stakeholders, MCA, and others?
9. Interesting facts about XBRL Blue Consulting Pvt. Ltd.24 Index www.xbrlconsulting.co.in Presently, there is no software available in the market which does automatic tagging. XBRL software prices ranges from Rs. 5,400 to Rs. 400,000. Similarly, conversion fee ranges from Rs. 9,000 per company to Rs. 45,000 per company and Rs. 300 per page to Rs 3,000 per page. No certification/ accreditation process for XBRL softwares and service providers.
…contd. (Interesting facts about XBRL) Blue Consulting Pvt. Ltd.25 Index www.xbrlconsulting.co.in At present, there is not much difference in effort in tagging between a listed company and an unlisted company. There are service providers who quote their fees over the phone without ascertaining the complexity of Financial Statements. Complete dearth of channels which can train/educate clients about XBRL process.
Contact us Blue Consulting Pvt. Ltd. is a listed service provider for XBRL conversion by MCA. Blue Consulting Pvt. Ltd. 26 Index www.xbrlconsulting.co.in BC, has its roots in a well established,Index four decade old chartered accountants firm. Chandan Goyal We have a separate division for XBRL Chief Executive Officer conversion services. email@example.com Our XBRL team members also have +91 98104 10421 experience of XBRL filing for UK and US +91 120 4230649 companies as well. For further detail, please log on to: www.xbrlconsulting.co.in Delhi Pune “A dream is not that which you see in sleep A dream is that which does not let you sleep”