Detailed presentation on XBRL conversion services Blue Consulting Pvt. Ltd. Doing common things, Uncommonly well.July 13’ 2009 Blue Consulting Pvt. Ltd. Consulting F&A Outsourcing Internal Audit A Finance & Accounts Outsourcing Company
Index Blue Consulting Pvt. Ltd.2 Index www.xbrlconsulting.co.in Back- Need for XBRL in MCA Common ground XBRL India Mandate terms How to Interesting Tagging How to Process Fee decide a facts about require- XBRL in tag? Flow factors service ment India provider? About us Contact us
1. Background Blue Consulting Pvt. Ltd.3 Index www.xbrlconsulting.co.in XBRL stands for eXtensible Business Reporting Language. As the name suggests, XBRL is a language for the electronic communication of business and financial data which is revolutionising business reporting around the world. The standardisation in-built in the XBRL documents provides significant benefits in the preparation, analysis and communication of business information. XBRL was started in 1998 by an American CPA, Charles Hoffman. It is being promoted all over the world by XBRL International, a non-profit organisation of approx. 450 entities. It is successfully being used in USA, UK, Japan, Singapore and many other countries globally.
2. Need for XBRL Blue Consulting Pvt. Ltd.4 Index www.xbrlconsulting.co.in No standard format of reporting Language dependency Extensive manual efforts on data analysis Foundation for IFRS implementation
3. XBRL in India Blue Consulting Pvt. Ltd.5 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 the top 100 listed companies in India to report their quarterly results etc., to BSE & NSE in XBRL. It is called Corpfiling. Now, it is 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.
4. MCA mandate Blue Consulting Pvt. Ltd.6 Index www.xbrlconsulting.co.in The 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 The above companies 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, Non Banking Financial Companies (NBFCs). A practicing Chartered Accountant or Company Secretary or Cost Accountant is required to certify the XBRL document.
5. Common terms Blue Consulting Pvt. Ltd.7 Index www.xbrlconsulting.co.in Taxonomy Taxonomy, in general, means a catalogue or set of rules for classification; in XBRL, taxonomy is referred yo 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. 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; it is identified by name and may have a set of attribute specifications as per the XBRL standards.
…..contd. (Common terms) Blue Consulting Pvt. Ltd.8 Index www.xbrlconsulting.co.in Data types This attribute indicates the data expected for concepts. Common data types are monetary, string, text block, etc. Instance documents The final output, which is converted in XBRL format, is called an instance document. Two instance documents are generated - Balance Sheet and Income Statement (Profit & Loss a/c). For a listed company having subsidiary companies, two sets of instance documents are generated, i.e., one on a standalone basis and the other on a consolidated basis.
6. Tagging requirement Blue Consulting Pvt. Ltd.9 Index www.xbrlconsulting.co.in Detailed tagging Balance sheet and its schedules Text Block tagging Profit and loss a/c and its Director’s report schedules Auditor’s report Cash flow statement Notes to accounts Related party transactions (party wise) Segment reporting Subsidiary and Holding Note: company information In our experience, detailed tagging takes Associates and Joint Ventures approx. 90% of total tagging time
7. How tagging is done? Blue Consulting Pvt. Ltd.10 Index www.xbrlconsulting.co.in For tagging, one need to have a good knowledge of Financial Statements (i.e., Schedule VI and Accounting Standards), and familiarity with taxonomy and its related concepts. Most software comes can import Financial Statements in Excel and Word format to start the tagging process. Typically, on one side there are Financial Statements and ,on the other side, elements (tags) are displayed. One needs to choose an appropriate tag and continue tagging the entire Financial Statements. You can see a detailed view of taxonomy, you can access it here: bigfootcorefiling.com
8. Process flow of conversion Blue Consulting Pvt. Ltd.11 Index www.xbrlconsulting.co.in Client Client provides soft copy of Annual Report of FY 2010-11 XBRL conversion Analysis of Mapping and Review and XBRL instance service provider Annual Report tagging validation document Client Review and upload of XBRL documents to MCA website
9. Fee factors Blue Consulting Pvt. Ltd.12 Index www.xbrlconsulting.co.in XBRL conversion fee is based on the time spent on the conversion process. This varies across different clients because of the volume of data and level of complexity in Financial Statements. The tagging effort, in the case of two companies with a similar number of pages in their Annual Report can vary as drastically as from 50% to 100%. The professional fee for XBRL conversion is normally based on the following factors: No. of pages in the annual report No. of subsidiaries of the company Volume of related party transactions Level of complexity in the Financial Statements
10. How to select a service provider? Blue Consulting Pvt. Ltd.13 Index www.xbrlconsulting.co.in Experience Ask service providers about their experience in handling Financial Statements across various industries. Ask about the number of years in existence; total team size. The nature of services provided by the service provider can be a good indication of its knowledge of Financial Statements. XBRL conversion process Ask the service provider about its 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.
…contd. (How to decide a service provider?) Blue Consulting Pvt. Ltd.14 Index www.xbrlconsulting.co.in XBRL Team Enquire about the following from a prospective service provider: 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.
…contd. (How to decide a service provider?) Blue Consulting Pvt. Ltd.15 Index www.xbrlconsulting.co.in Clients references 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. Confidentiality of information 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)?
11. Interesting facts about XBRL in India Blue Consulting Pvt. Ltd.16 Index www.xbrlconsulting.co.in To convert Financial Statements in XBRL format, one needs to have a professional understanding of Financial Statements and Business Rules defined for Taxonomy. Software is just an enabler. It cannot replace or replicate domain knowledge. Presently, there is no software available in the market which can tag automatically. XBRL software prices range from Rs. 5,400 to Rs. 400,000. Similarly, conversion fees range from Rs. 9,000 per company to Rs. 45,000 per company and Rs. 300 per page to Rs. 3,000 per page. Presently, there is not much difference in the effort involved in tagging a listed company and an unlisted company.
…contd. (Interesting facts…) Blue Consulting Pvt. Ltd.17 Index www.xbrlconsulting.co.in There are service providers who quote their fee over the phone without ascertaining the nature and complexity of Financial Statements involved. The quality of tagging (i.e., choosing a particular tag) plays an important role in making tagged Financial Statements useful for analysis. However, this area is normally overlooked by clients while engaging any service provider for conversion service.
12. About us Blue Consulting Pvt. Ltd.18 Index www.xbrlconsulting.co.in Blue Consulting Pvt. Ltd. (BC) is a listed service provider for XBRL conversion by MCA. BC, has its roots in a well established, four decade old chartered accountants firm. BC provides value added and high quality services in the domain of Finance & Accounts: Consulting services Finance & Accounts Outsourcing Services Internal Audits We have a separate division for XBRL conversion services. We specialize in statutory compliance outsourcing services.
…contd. (About us) Blue Consulting Pvt. Ltd.19 Index www.xbrlconsulting.co.in Key associates at BC have rich experience in the area of Finance, Taxation, Accounts, Management and Information Technology. Our XBRL team members also have experience of XBRL filing for UK and US companies as well. Utilizing forty years of industry experience and functional expertise, BC looks innovatively beyond standard solutions to develop new insights, drive tangible results, and empower clients to achieve greater results. Providing quality service with complete responsibility is natural to our corporate culture.
13. Contact us Blue Consulting provides value added and high quality Finance & Accounts related services through its vast pool of experienced professionals. Our goal Blue Consulting Pvt. Ltd. 20 Index is to be a trusted partner in your business by www.xbrlconsulting.co.in bringing value and serving as an integral part ofIndex your set up. Blue Consulting, or BC, has its roots in a well Chandan Goyal established, four decade old chartered accountants Chief Executive Officer firm. Utilizing forty years of industry experience and firstname.lastname@example.org functional expertise, BC looks innovatively beyond standard solutions to develop new insights, drive +91 98104 10421 tangible results, and empower clients to achieve +91 120 4230649 greater results. For further detail, please log on to: www.blueconsulting.co.in Delhi Pune “A dream is not that which you see in sleep A dream is that which does not let you sleep”