MCA asks institutes to impart training to its professionals to improve quality of XBRL filings

Quality of XBRL filing certified by Professional members

General Circular No. 33/2012, dated 16-10-2012

You are aware that XBRL filing of financial statements by a select class of companies for FY 2010-11 was mandated vide Ministry of Corporate Affairs Notification GSR No. 748(E), dated 5-10-2011. The e-forms were duly certified by CA/CS/CWA professionals for their completeness and correctness in representation with respect to audited financial statement of the company.

2. A random scrutiny of XBRL filing of financial statements by few companies to MCA for FY 2010-11 reveals significant variations in disclosures in published results and the XBRL filings due to ‘incorrect’ mapping of disclosures. It has been observed that few disclosures were ‘mapped/tagged’ with incorrect accounting concept despite availability of appropriate element in taxonomy. It has also been observed that provisions of “Block Text tagging” and/or “Footnote” have been inappropriately used to report disclosures, like subsidiary details, related party transactions, Director’s Report, etc., even when appropriate elements were available in the taxonomy for such disclosures. Few instances of “incorrect” tagging of XBRL documents are provided at Annexure-I.

3. Such filing are inaccurate and do not adequately represent true and fair view of the state of affairs of the company as per section 211 of the Companies Act, 1956. Such XBRL filings, apart from being misleading, also dilute the effectiveness of XBRL for stakeholders’ usage relating to the companies. It is unfortunate that professionals have certified the authenticity of such incorrect data, for which they are liable to be penalized. Such lapses defeat the very purpose of introducing XBRL filings which are meant to elicit more detailed and refined information as to the affairs of companies. Please note that XBRL filings are being minutely scrutinized to see if similar mistakes also appear in a larger sample.

4. It is bounden duty of Institutes to direct its members to take necessary steps to improve the quality of XBRL filing for FY 2011-12 to be undertaken by its members. The Institute may conduct further trainings, issue guidelines, etc. so that such quality related issues are appropriately resolved.

5. This may be accorded high priority.

ANNEXURE-I

GENERAL XBRL FILING ERRORS

ErrorsObservation
Cash Flow Statement not taggedThe Cash Flow Statement for FY 2010-11 is available in the Audited Financial Statements (PDF file). However, the same has not been tagged in XBRL financial statements filed at MCA portal.
Information of all subsidiaries not provided in XBRL financial statementsInformation about one Subsidiary has been tagged in XBRL financial statements whereas the Company had nine Subsidiaries.
Information of all related party transactions not provided in XBRL financial statementsRelated Party Disclosures have not been tagged in XBRL financial statement.
Parenthetical (additional disclosures) information not tagged in XBRL financial statementsAggregate Market Value of Investments not provided by way of footnote. Additional information on Issued, Subscribed & Paid up Share Capital not explained by way of footnote.
Footnotes not tagged in XBRL financial statements.Footnotes on Share Capital, Secured Loan, Reserve and Surplus, unsecured loan-Fixed deposits, Investments, Fixed Assets, Security deposit, etc. have not been tagged. Footnote on “Investments” has not been given.
Different presentation in PDF and XBRL filingsThe Annual Report presented before the shareholders the figures were presented in Rs. Thousands whereas in the XBRL documents the figures were provided in Rs. Lakhs.
Incorrect usage of FootnoteDirector’s Report provided by way of footnote whereas separate tags are available for tagging of Directors’ Report. Similarly, for Auditors’ Report, Significant Accounting policies, Unsecured Loan, Current Liabilities, etc. Footnote has been incorrectly used.

INCORRECT USAGE OF TAGS

A. When appropriate taxonomy element is available
Line ItemTag Used (label)Correct Tag (label)
Secured Cash Credit from BanksTerm LoanWorking Capital Loans Banks Secured
Investment in Quoted Equity SharesUnutilized MoneyEquity Securities Long Term Quoted
Bad debts written offOther Provisions CreatedBad debts Advances written off
Investment (joint Venture)Equity securities long-term unquoted non-tradeInvestment joint ventures
Power and fuel expensesElectricity expensesCost power fuel
Advertising and Brand marketingTravelling conveyanceAdvertising and promotional expenses
Travelling and conveyanceLegal professional chargesTravelling conveyance
Purchase/sale of Fixed AssetsPurchase other Assets, Proceed disposal other assetsPurchase tangible fixed Assets, Proceeds sale disposal tangible fixed assets
B. Incorrect tagging/inaccurate disclosures
Line ItemTag UsedCorrect TagRemarks
Stock Differential-(Decrease)/lncreaseNot tagged separatelyIncrease decrease inventoriesClubbed with ‘Other expenditure’.
Salaries, Wages & BonusTagged as zeroAmount is Rs. 92,539,039It is a mandatory tag. Clubbed with ‘Other expenditure’.
Power, Fuel, Water & GasTagged as zeroAmount is Rs. 248,737,864Clubbed with ‘Other expenditure’.
Manufacturing CostTagged as zeroClubbed with ‘Other expenditure’. It is a manufacturing company.
RAW MATERIALS CONSUMED Opening StockNot taggedStock of Raw Materials, Opening BalanceGiven as part of footnote to ‘Raw Materials Consumed’
RAW MATERIALS CONSUMED Add: PurchasesNot taggedPurchase raw materials during year
RAW MATERIALS CONSUMED Less: Closing StockNot taggedStock of Raw Materials, Closing Balance
Deferred Tax Liability (Net)Net Deferred Tax AssetsDeferred Tax LiabilityTagged with negative sign.
Deferred tax liabilities(Net)Deferred tax liability depreciationDeferred tax asset other, Deferred tax asset VRS payment, Deferred tax asset provision for doubtful debts, etc.Disaggregated disclosures all consolidated into ‘Deferred tax liability depreciation’

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