ICAEW- implementing xbrl -setting the scene


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ICAEW- implementing xbrl -setting the scene

  1. 1. Dr Paul Booth Technical & Development Manager, IT Faculty SETTING THE SCENE
  2. 2. The story so far • XBRL is all about tagging • … but the tags are electronic • A bit like a bar code • … for financial reporting concepts
  3. 3. A bit like a bar code … • But instead of tagging a tin of beans • … we’re tagging an item in a set of accounts
  4. 4. But what’s this ‘i’? • iXBRL = Inline eXtensible Business Reporting Language • It’s still XBRL – same tags etc • … but the ‘i’ bit means that human eyes can read it too
  5. 5. Lots of applications of XBRL • … but it’s HMRC’s impending requirement that is concentrating minds. • CT filings submitted after 31 March 2011 for year-ends after 31 March 2010 must be done online, using iXBRL for – Accounts – Computations • Today we’re focusing mainly on the accounts. The tax computations bit is relatively straightforward.
  6. 6. How do we make the iXBRL? • Wide range of methods • But many software products not yet publicly available • … in some cases, even though they are ‘recognised’ by HMRC • Which method is best depends on circumstances: who you are, what you do, existing methodology, business priorities, etc.
  7. 7. Year-end Accounts Production and Filing Bookkeeping Year-end accounts Filing
  8. 8. Some scenarios … … but they come with a health warning … and not pretending to be comprehensive I’m not necessarily describing anyone who’s here The ‘best’ solution for your practice/business could depend on many factors
  9. 9. Scenario 1: just one simple filing • One single, simple business. Just one filing per year. (Or possibly a practice with a very small number of client filings.) Likely Possible solution: HMRC’s free product • Does the whole filing: accounts, comps, CT600 • But it’s limited: suitable only for ‘smaller companies … with less complex tax affairs • A bit slow and clunky.
  10. 10. HMRC’s free product Bookkeeping Type into a form iXBRL filing accts comps CT600
  11. 11. Scenario 2: already using AP software • Practice doing filings for several clients and using established accounts production software product. Likely Possible solution: Use your AP supplier’s iXBRL- enabled product • For many sets of accounts, could be as simple as clicking the new ‘iXBRL output’ button. • But make sure your supplier is releasing an upgrade, and on time. • Accounts that depart from standard template may need extra work.
  12. 12. Accounts Production Software Bookkeeping Year-end accounts + other adjustments and inputs Software adds XBRL tags Tagged accounts
  13. 13. Scenario 3: currently use Word/Excel • Practice with several clients, or business with several subsidiaries – multiple filings to do Likely Possible solution (a): get iXBRL-enabled AP software • May be more efficient in the long term • But significant change to existing processes
  14. 14. Scenario 3: currently use Word/Excel • Practice with several clients, or business with several subsidiaries – multiple filings to do Likely Possible solution (b): use post-production converter/tagger or outsourced iXBRL service • No disruption to your existing processes • But you have an extra task at the end of those processes • … or you have an extra expense and supplier to manage
  15. 15. Post-production tagging Bookkeeping Year-end accounts No change in present process Extra process Extra process Tagged accounts Software adds XBRL tags
  16. 16. Scenario 4: currently do both book- keeping and accounts prep/tax filing • … whether in business or in practice Likely Possible solution: use ‘end-to-end’ software that does it all, or two closely integrated products • Probably the greatest potential efficiency gains • But probably the biggest disruption to existing processes
  17. 17. ‘End to end’ software Bookkeeping Year-end accounts Single software product does both bookkeeping and AP Tagged accounts … and adds XBRL tags
  18. 18. Scenario 5: currently do tax filings but not final accounts preparation • … taking the final accounts as a ‘given’, from the client or from client’s other adviser Likely Possible solutions (a) get A N Other to supply an iXBRL file; (b) get them to supply a Word file and use post-production converter or outsource • Not necessarily your problem • Make sure you are given the correct accounts
  19. 19. The ‘soft landing’ • HMRC say ‘sympathetic approach’ to penalties in first two years – Reasonable Excuse – Reasonable Care • In the first two years, we can use a smaller ‘dictionary’ of tags – Not everything in accounts will need to be tagged.
  20. 20. Don’t panic! • XBRL page: www.icaew.com/xbrl • HMRC’s ‘recognised’ list: www.hmrc.gov.uk/efiling/ctsoft_dev.htm • Implementing XBRL publication soon on www.ion.icaew.com/itcounts Paul Booth IT Faculty 020 7920 8476 paul.booth@icaew.com Further information available