The objective of the Guidance Note issued by ICAI is to provide guidance to the practitioners in certification of XBRL formatted statements in terms of the requirements of the Ministry’s General Circular No. 57/ 2011 dated July 28, 2011 read with MCA’s General Circular No. 43/2011 dated July 07, 2011. These Circulars require that besides signing by signatories as specified under section 215 of the Companies Act, 1956, the financial statements prepared in XBRL mode for filing on MCA-21 portal would also need to be certified by, inter alia, a Chartered Accountant. The financial statements referred here would mean the balance sheet, the profit and loss account, the cash flow statements and the related notes to account.
The following is the summary of the Guidance Note:
XBRL makes the data readable with the help of two documents – the taxonomy and the instance document.
3. Taxonomies are dictionaries that contain the terms used in the financial statements and their corresponding XBRL tags (i.e., electronically readable codes for each item of financial statements).
4. Instance document is a file that contains business reporting information and represents a collection of financial facts and report – specific information using tags from one or more XBRL taxonomies. The instance document is a computer file that contains entity’s data and other entity specific information and is generally not intended to be read by the human eye. Thus, an XBRL instance document is a business report in an electronic format created according to the rules of the XBRL.
The Ministry of Corporate Affairs, Government of India, vide its General Circular No. 37/2011, dated June 07, 2011 has required the following class of companies (except banking companies, insurance companies, power companies and the Non Banking Financial Companies) to file the financial statements in XBRL form only from the year 2010–2011:
(i) All companies listed in India and their Indian subsidiaries;
(ii) All companies having a paid up capital of Rs 5 crore and above; and
(iii) All companies having a turnover of Rs 100 crore and above.
It has now been decided (General Circular No. 16/2012, dated 6-7-2012) by the Ministry to mandate the following select class of companies to file their Balance Sheet and Profit & Loss Account in XBRL mode for the financial year commencing on or after 1-4-2011:
(i) all companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or
(ii) all companies having paid up capital of Rupees five crore and above; or
(iii) all companies having turnover of Rupees one hundred crore and above; or
(iv) all companies who were required to file their financial statements for FY 2010-11, using XBRL mode.
However, banking companies, insurance companies, power companies and Non-Banking Financial Companies (NBFCs) are exempted from XBRL filing till further orders.
The applicable taxonomy as per Schedule VI of the Companies Act, 1956 has already been placed on the Ministry’s website www.mca.gov.in. The Business Rules, validation tools, etc. required for preparing the financial statements in XBRL format, as per the revised Schedule-VI and Accounting Standards, are under preparation and would soon be made available by the Ministry. The actual date for enabling XBRL filing will be intimated separately.
7. Objective of this Guidance Note:
The objective of the Guidance Note is to provide guidance to the practitioners in certification of XBRL formatted statements in terms of the requirements of the Ministry’s General Circular July 07, 2011. These Circulars require that besides signing by signatories as specified under section 215 of the Companies Act, 1956, the financial statements prepared in XBRL mode for filing on MCA-21 portal would also need to be certified by, inter alia, a Chartered Accountant. The financial statements referred here would mean the balance sheet, the profit and loss account, the cash flow statements and the related notes to account.
8. Management Responsibility:
The responsibility for ensuring that the financial statements generated in the XBRL format are in accordance with the prescribed taxonomy is that of the management of the Company. Accordingly, the management needs to exercise appropriate controls over the following three areas to manage risks associated with generation of XBRL financial statements:
a) Selecting, maintaining, and testing the taxonomy;
b) Accurately mapping and tagging data elements to XBRL reports; and
c) Enforcing change management procedures for XBRL processes.
9. Procedures for Certification:
The practitioner’s procedures in respect of XBRL financial statements would, ordinarily, be as follows:
|Completeness means that all required information is formatted at the required levels as defined by the entity’s reporting environment. Only permitted information selected by the entity is included in the eXtensible Business Reporting Language (XBRL) files.Mapping means that the elements selected are consistent with the meaning of the associated concepts in the source information in accordance with the requirements of the entity’s reporting environment.
Accuracy means that the amounts, dates, other attributes (for example, Monetary units), and relationships (order and calculations) in the instance document and related files are consistent with the source information in accordance with the requirements of the entity’s reporting environment.
Structure means that XBRL files are structured in accordance with the requirements of the entity’s reporting environment.
10. Essentials of a good XBRL Certificate: In respect of the format of the certificate, the certain factors need to be taken care of, including:
(For XBRL Conversion Outsourcing Services by KGMA visit at www.kgma.in or contact at 9953590104, 9899954015)