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XBRL- The New World of Reporting

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Basics of XBRL - The New World of Business Accounts Reporting

Basics of XBRL - The New World of Business Accounts Reporting

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  • 1. XBRL eXtensible Business Reporting Language CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 2. XBRL • XBRL translates long form financial data both from the tables and the footnotes in financial reports, into a format that computers can read and understand. • The initial goal of XBRL is to provide an XML-based framework that the global business information supply chain will use to create, exchange and analyse financial reporting information. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 3. XBRL • XBRL is a data-rich dialect of XML, the universally preferred language for transmitting information via the internet. • It was developed specifically to communicate information between businesses and other users of financial information, such as analysts, investors and regulators. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 4. XBRL XML stands for eXtensible Mark-up Language. • Extensible means language that can be extended by anyone who wants to create additional ways to use it. • Mark-up means that XML’s primary task is to give definition to text and symbols. • Language means that XML is a method of presenting information in understandable formats. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 5. XBRL • XBRL provides a common, electronic format for business reporting. It does not change what is being reported but only changes how it is reported. • XBRL is a worldwide standard, developed by an international, non-profit-making consortium. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 6. XBRL Framework CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 7. XBRL in MCA Ministry of Corporate Affairs vide its General Circular No. 09/2011 dated 31.03.2011 mandated certain class of Companies who are covered under Phase I. Following class of companies are required to file their Balance Sheet and Statement of Profit & Loss in XBRL format: i. All companies listed in India and their subsidiaries ii. All companies having a paid up capital of Rs. 5 crore and above iii. All companies having a turnover of Rs. 100 crore and above CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 8. CA. Kishor Dichwalkar, ca.ksdco@gmail.com • Ordinary users of XBRL may be largely or totally unaware of the technical infrastructure which underpins the language. However, software companies, such as accountancy software providers, need to take account of XBRL and its features when producing their products. • Now we will see a small example of XBRL -- intended for reading by computers, not humans. To see what it represents How does XBRL Works
  • 9. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 10. CA. Kishor Dichwalkar, ca.ksdco@gmail.com The same XBRL data in Human Readable form:
  • 11. Process of XBRL conversion Step 1 • Obtain audited Financial Statements Step 2 • Prepare Source Document Step 3 • Mapping of Source Document with MCA mandated Taxonomy. Step 4 • Validating the mapped document and Error Elimination. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 12. Process of XBRL conversion Step 5 • Elimination of Errors Step 6 • Approval from Board and Instance Document Creation Step 7 • Validation of Instance Document with MCA tool and filing with ROC CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 13. Taxonomy Taxonomy can be referred as an electronic dictionary of the reporting concepts. Taxonomy consists of all data definitions, the basic XBRL properties and the interrelationships amongst the concepts. It includes terms such as net income, EPS, cash, etc. Each term has specific attributes that help define it, including label and definition and potentially references. Taxonomies may represent hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships among them, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 14. Instance Document Instance document is a business report in an electronic format created according to the rules of XBRL. It contains facts that are defined by the elements in the taxonomy it refers to, together with their values and an explanation of the context in which they are placed. XBRL Instances contain the reported data with their values and “contexts”. Instance document must be linked to at least one taxonomy, which defines the contexts, labels or references. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 15. Documents required for XBRL Conversion a. Audited Accounts – Balance Sheet, Statement of Profit & Loss and Cash Flow Statement b. Director’s Report c. Auditor’s Report d. Subsidiary Company Information e. Additional Information required under XBRL Taxonomy CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 16. Steps for filing financial statements in XBRL format on MCA portal • Creation of XBRL instance document • Download XBRL validation tool • Locate/Load the instance document • Validate the instance document • Pre-scrutiny of instance document • Convert to pdf and verify the contents of instance document • Attach instance document to the Form 23AC-XBRL and Form 23ACA-XBRL • Submitting the Form 23AC-XBRL and Form 23ACA-XBRL on the MCA portal • Viewing of Balance Sheet and Statement of Profit & Loss submitted in XBRL form on MCA portal CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 17. XBRL India CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 18. Formation of a group on XBRL in India In the year 2007 the Institute of Chartered Accountants of India (ICAI), the premier accounting body and the National Standard setter constituted a Group for promotion and development of XBRL in India. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 19. Support of Regulators The group had representatives of the major regulators in India viz. the • Securities and Exchange Board of India (SEBI) • Ministry of Corporate Affairs (MCA) • Reserve Bank of India (RBI) • Insurance Regulatory and Development Authority (IRDA) • National Stock Exchange (NSE) • Bombay Stock Exchange (BSE) CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 20. XBRL India In the year 2008, ICAI set up an Indian XBRL Jurisdiction in the year 2009 as an extended arm of XBRL International in India. The Jurisdiction was Provisional in nature for a period of 2 years. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 21. XBRL India – an Established Jurisdiction In the year 2010, XBRL India was awarded the status of an “Established jurisdiction” capable of having a representative of India at the International Steering Committee (ISC), the governing body of XBRL International. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 22. XBRL India – A Company ‘XBRL India’ is now a company registered U/s 25 of Companies Act, 1956. The company is facilitated by ICAI. It has been incorporated for managing the affairs of Indian Jurisdiction of XBRL International. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 23. Website of XBRL India A separate website dedicated to the XBRL India Jurisdiction to keep members and other users aware about the Indian XBRL Jurisdiction has been set up by the ICAI. Its URL is www.xbrl.org/in. CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 24. WHY XBRL? Advantages of XBRL: • Standard – XBRL is a standard that has been accepted and adopted the world over, thus reducing inconsistencies in terminologies and data formatting • Accuracy – XBRL provides highly accurate data as the data can be both calculated and verified • Speed – XBRL allows much faster and real-time preparation of reports and at the same time allows efficient, accurate and relevant ways to search data CA. Kishor Dichwalkar, ca.ksdco@gmail.com
  • 25. • Reusable – XBRL data once entered can be reused to represent the same data in multiple ways and multiple formats • Platform Independent – XBRL is an open standard and hence platform independent, this allows the data to be exchanged and transferred with ease • Region Independent – XBRL allows the presentation and exchange of data in many different languages CA. Kishor Dichwalkar, ca.ksdco@gmail.com WHY XBRL? Advantages of XBRL:
  • 26. Thank You CA. Kishor Dichwalkar, ca.ksdco@gmail.com

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