XBRL|A medium to exchange financial Information

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XBRL|A medium to exchange financial Information

XBRL is an eXtensible Business Reporting Language. It is a standardised and structured way of communicating business and financial information in an electronic format. In this language, the definitions (tags) uniquely represent the content of each financial statement or other compliance and business reports.

So because of structured elements of data, the reporting of information between two organisations becomes accurate and completely digital. The language was developed specifically to communicate information between businesses and other users of financial information, such as analysts, shareholders and regulators.

Why XBRL is Important for Filing?

The XBRL makes the data readable with the help of two documents; Taxonomy and instance document. 

The taxonomy defines the elements and the relationships based on the regulatory requirements. So, by using it the companies can track their XBRL reports and generate a valid XBRL instance document. However, information such as a unit of measurement, period of data, scale of reporting, etc must add into the instance document.

So, the XBRL filing increases the efficiency, accuracy and reliability of those who are involved in the business and financial data. By presenting the financial statements in XBRL, the company can benefit the investors and other stakeholders.

Uses of XBRL in Organisations

The following are the uses of organisations and these are as follows:

• Company internal and external financial reporting.
• Reporting of all types of regulators including tax, financial authorities, central banks and government. 
• Filing of loan reports and applications.
• Exchange of information between government departments or between other institutions such as central banks.
• A wide range of other financial and statistical data needs to be stored exchanged and analyzed.

Myths About XBRL Filing

• XBRL imposes reporting and regulatory burdens on the reporting companies.
• Taxonomies always make use of generic concepts; specific concepts cannot be tagged using taxonomies. Companies have an option to create their company-specific concepts.
• XBRL cannot disclose the information the way the company reports.
• XBRL is a cure for all accounting problems.

Documents Required to File in XBRL Form

The following documents are required if you want to file the XBRL form:

• An entire set of financial statements ( Balance sheet, Profit and loss accounts)
• Director report.
• Independent auditors report
• Statement of financial position
• Income statement
• Statement of cash flows
• Corporate and general information
• Trade and other receivables
• Trade and other payables
• Trade and other payables, Share capital, Property, plant and equipment
• Any other statement which defines company performance and position.

Role of ICAI in XBRL

A website dedicated to XBRL India Jurisdiction is available for members and other users to be aware of the Indian XBRL Jurisdiction. The role of ICAI is to assist the regulators and users of the financial statements by:

• Developments of XBRL taxonomies.
• Ensure compliance of taxonomies with the Companies Act 1956.
• Maintain and update the XBRL taxonomies from time to time according to the requirements and any revision in Accounting Standards and changes in law and regulations.

How to Use XBRL to Exchange Financial Data?

The XBRL is a member of the family of languages based on XML or Extensible Markup Language. The business can file the financial statements in XBRL form in the MCA21 system.

Step 1: Creation of XBRL instance document

In this step, map the company’s financial statement element to a corresponding element in the published taxonomy. Then create an instance document for the Balance sheet and Profit and loss account. After preparation of the instance document, review and verify the instance document.

Step 2: Download the XBRL validation tool from the MCA portal

On the website, a tool is provided for validating the generated XBRL instance document. Validating the instance document is a pre-requisite before filling the balance sheet and P/L account.

Step 3: Use the tool to validate the instance document

Once the tool is downloaded, validate the instance document. The multiple validations can performed by the tool.

Step 4: Perform pre-scrutiny of the validated instance document through the tool

In this step, pre-scrutinise the validated instance document with the help of the same tool. A working internet connection is required for pre-scrutinising and in this the server-side validations must be performed.

Step 5: Attach instance document to the Form 23AC and Form 23ACA

A separate set of Form 23AC and Form 23ACA is available on the MCA portal for filing the XBRL form. So, first, fill out the form, then attach the validated and pre-scrutinised instance document for the balance sheet and P/L account. The separate instance documents must attach to the form. 

Step 6: Submitting the Form 23AC and Form 23AC on the MCA portal

After the forms are filled, you are required to perform the pre-scrutiny of the form, sign the form and then upload the same as per the normal eForm filing process.

Conclusion

The XBRL is a powerful and flexible version of XML which is defined specifically to meet the requirements of business and financial information. However, the structure of XBRL allows the handling of business data by computer software. It supports all the standard tasks that are involved in the compilation, storage and final usage of business data. If you are looking for a file XBRL return, then reach out to Registrationwala.

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