What is XBRL?
• XBRL stands for eXtensible Business Reporting Language.
• XBRL is a more advanced form of XML (Extensible Markup Language) based, computer-readable financial reporting language. (XML reporting is already being used by the Income-tax Department in India)
• It is used to express business (financial) reporting content.
• Instead of treating financial information as a block of text, XBRL provides a tag for each individual item of data – making it crunchable.
• XBRL, often referred to as “Interactive Data”, gives the financial community a standards-based method to prepare, publish, exchange, search, and analyse financial statements.
• This allows data to be treated intelligently.
What is the MCA mandate?
XBRL filing is mandatory for companies which fall in the above mentioned criteria. It is
optional for others.
• All companies listed in India and their subsidiaries (Subsidiary of listed company are required to file in XBRL format, irrespective of its paid up capital)
• All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above, is required to file annual return in xbrl format.
There shall be a separate set of Forms available on the MCA portal for filing in XBRL form. Different forms are also available on MCA website, for the company’s for whom XBRL is not mandatory.
What needs to be filed?
• Balance sheet and its schedules (existing Schedule VI)
• Profit Loss Account and its schedules (existing Schedule VI)
• Cash flow statement
• Notes to Accounts
• Auditor’s Report
• Director’s Report
• Company Information, signatures to balance sheet etc..
Steps involved in XBRL Filing:
Step 1:
Creation of Instance Document using XBRL conversion tool or utility.
• Mapping and Tagging of financial statement element to a corresponding element in published taxonomy.
• Create the instance document.
• Review and verify the instance document.
Step 2:
Downloading the XBRL Validation tool of MCA
There is a tool provided at the MCA portal for validating the generated XBRL instance document. Validating the instance document is a pre requisite before filing the balance sheet and profit & loss account on MCA portal.
Step 3:
Validation of Instance Document using the tool.
Step 4:
Perform Pre-scrutiny of the validated instance document through the tool.
Step 5:
Attach validated and Pre-scrutinised instance document to Forms
Step 6:
Submit the forms to MCA portal
Conversion of Financial statements to XBRL instance documents
- XBRL will improve the relevance and quality of financial analysis.
- Allows for quick and easy comparisons of data : Investors may use the tagged data in online databases to screen and compare companies data.
- Standardisation and reduced errors : Because computers can read information presented in an XBRL format, information can be transferred without being manually recaptured.
- Companies can benchmark : Listed companies can now benchmark themselves against their industries/sectors and peers far more easily and it’s easier to do globally since many companies see their peers as global companies.
- Multiple uses for data : Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort and used by various stakeholders.
- Lower cost to acquire information : Investment firms will be able to reduce costs through the use of
- Greater transparency can result in a lower cost of capital