XBRL stands for extensible Business Reporting Language. It is a language used for exchanging business information and financial data which is transforming Business Reporting around the world. XBRL provides significant advantages in the preparation, analysis and communication of business information of the Company.
Applicability of XBRL
Using the extensible Business Reporting Language (XBRL) taxonomy for financial year commencing on or after April 1, 2014 is compulsory under Section 137 of the Companies Act, 2013 for the following companies:
- Companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or
- Companies having paid up capital of INR 5 crores and above; or
- Companies that have turnover of INR 100 crores and above; or
- Companies that are already covered under the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011.
Which entities have exemption from XBRL filing?
- Banking and Insurance Companies
- Power Sector
- Non-Banking Financial Companies (NBFCs)
What is the checklist of procedure of XBRL filing?
- First step is to examine whether the company falls under the limit of XBRL
- Install the XBRL Software from XBRL Software dealer.
- The parent system is considered as the main system and other systems are regarded as the client systems.
- Check that the net connection is active in the main system as well as client systems.
- Create the User ID and Password for the Company.
- Fill in all the relevant data on the XBRL generated Company. The data of the company to be filled contains Financial tagging, Fixed Asset tagging and Non-financial tagging.
- After filling the details, check the errors generated.
- Eliminate the errors generated to nil.
- Generate the XML file of the Company- Instance Document
- Download the C&I taxonomy from Ministry of Corporate Affairs (MCA) Portal.
- Validate the XML document using MCA XBRL validation tool V2.0.4 available on MCA21 portal.
- Extract the PDF of the same XML document.
- Attach the PDF extracted as an attachment in the annual filing form AOC-4 (XBRL).
- Upload the form AOC-4 on MCA Portal.
Frequently Asked Questions about XBRL Filings
XBRL increases the utilization of financial information of a company. It eliminates the need to re-write all the financial data for analytical and other purposes. A company can raise its profile by presenting its statements in XBRL to its investors. It will also help the regulators, lenders and others users of financial information of the company, who are increasingly demanding the reports in XBRL. This will also benefit the business relations of the company.
Companies can automate data collection with the full use of XBRL. For instance, data from different divisions of the company with different completely accounting systems can be gathered speedily, efficiently and inexpensively. Once the data is collected in XBRL, different reports can be produced with a minimal effort using varying subsets of the data. A company’s finance division, for example, could swiftly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. XBRL can make data handling automated; removing time-consuming, error-prone processes, and the data can also be checked by the software for accuracy purposes.
XBRL software can be purchased from the software vendors in the market. The software will be used in creating XBRL instance documents that will be uploaded on the MCA website. Stakeholders of the company may check whether the software is docile with the Business Rules published by the MCA. Also, MCA will provide a Validation Tool that will be used for validation of the instance document and filing of the same on the MCA Portal.
XBRL does benefits the comparability of financial statements by helping to identify information which is genuinely similar and distinguishing data which is incomparable.