How to File XBRL Return for NBFC?

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How to File XBRL Return for NBFC?

The XBRL stands for eXtensible Business Reporting Language. It is a language used for electronic communication between businesses through the financial data trader or business reporting by analysts, investors, regulators, etc. 

Through the help of XBRL, the computer can track data and process, organise and exchange it. The usage of tech in the process reduces the risk of misused information, misplaced or mistreated. So, the Reserve Bank of India (RBI) mandates that all NBFCs file the NBFC return in XBRL mode. This was implemented in the Financial year 2019-2020.

However, the objective behind this system is to take each financial information or term in a unique electronic tag. The XBRL is one part of ‘XML’ languages which now become a standard way of communicating information between businesses and the internet.  

What is NBFC?

The NBFCs are different from banks but provide services in the areas where banks don’t reach yet. The NBFCs have different types and these are Asset Finance Company (AFC), Investment Company (IC), Loan Company (LC), Infrastructure Finance Company (IFC), Systemically Important Core Investment Company and many more. Mainly the company is in the business of loans and advances. 

Every year, the NBFCs owning an asset size lesser than Rs 500 crores are mandated to choose the XBRL as their return reporting system. They must register themselves on the XBRL platform with the listing company details of Key Managerial Personnel (KMP). With the contact details such as official mail ID, and user ID registration.

How to File Financial Statements in XBRL Format?

Step 1: Creation of  XBRL instance documents 

Step 2: Download the XBRL validation tool

Step 3: Load the instance documents

Step 4: Validate the instance document

Step 5: Pre-scrutiny of the instance document 

Step 6: Convert to pdf and verify the contents of the instance document.

Step 7: Attach instance document to Form 23AC-XBRL and Form 23ACA-XBRL

Step 8: Submitting Form 23AC-XBRL and Form 23ACAXBRL on the MCA portal

Note: The steps for e-filing the documents in XBRL format in same as above.

Step 1: Creation of XBRL Instance Documents

First, begin with the company’s financial statements, then follow the three steps for the creation of documents:

1. Map the Company’s financial statement element to a corresponding element in the published taxonomy.
2. Create the instance documents.
3. Review and Verify the instance document.

Step 2: Download the MCA XBRL Validation Tool

A tool is available on the MCA XBRL portal to validate the instance document. Validating the documents is important before filing the balance sheet and profit & loss account. Download the tool from the portal and validate the documents before uploading. So, you can download the validation tool from the XBRL website of the Ministry.

Step 3: Load the Instance Documents in the Validation Tool

To load the instance documents, click on the open button, choose the documents, open it and load another document. You do not need to exit the tool for loading another document, just click on ‘open’ again in the menu bar to open the next document. The details of the company appear under the General Information tag in the XBRL viewer.

Step 4: Use the Tool to Validate Documents

In this step, validate the instance documents and for that perform the following steps:

• Validating that the instance document is as per the latest and correct version of the taxonomy prescribed by MCA.
• All mandatory elements have been entered.
• Other business rules as specified by MCA.
• Other validations as per taxonomy.

Step 5: Perform Pre-Scrutiny

Once you validate the instance documents, then in the next step perform pre-scrutinise by using the same tool. For pre-scrutinizing the instance document, an internet connection is required. In the pre-scrutiny, check the server-side validations. However, these are the validations that are not validated by the MCA21 system.

Step 6: Final Verification of Documents

After the pre-scrutiny of documents, the next step is to generate a PDF by using the ‘Export to PDF’ option in the tool and to verify the final instance documents. However, it is a must for the company and the professionals to certify the instance documents by using the feature to check their accuracy.

So, if there is an error in converting the PDF or the size of the PDF is zero kilobytes, then check the textual information entered in the instance document. Follow the HTML guidelines mentioned in the technical specifications to correct the instance documents and do the pre-scrutiny again.

Note: This step is essential to check that the textual information entered in the instance documents is clear and viewable. 

Step 7: Attach Document to the Form

Form 23AC-XBRL and Form 23ACA-XBRL are available on the MCA portal for filing in the XBRL form. Filing the financial statements on the MCA portal is important, so first, fill up these forms and then attach the validated and pre-scrutinised instance documents for the Balance Sheet to Form 23AC-XBRL.

Similarly, attach the instance document for the Profit and Loss account to Form 23 ACA-XBRL. Then attach the separate instance documents with Standalone financial statements and consolidated financial statements.

Step 8: Submit the Form

After filling out the form, perform a pre-scrutiny, sign a form and then upload it. Validate the form by stating that all the steps of validation are done through the tool.

Step 9: Viewing of Balance Sheet and P/L 

The documents shared with the Form 23AC-XBRL and 23ACA-XBRL are in the machine-readable format. So, to view the documents in human-readable format, convert them through the MCA21 system. To view the same on the MCA portal and take certified copies of the same, these converted documents must be available.

Conclusion

The NBFCs that fall under a specified asset size have better compliances, and following these compliances is important to avoid legal issues. The NBFCs that use XBRL get benefits such as cost savings, greater efficiency, improved accuracy, and reliability to all those involved in supplying or using financial data. We at Registrationwala, provide XBRL filing service to NBFCs, so if you are looking to file your company’s finances, then reach out to us.

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