21. leveraging xbrl tools mr. a k bhardwaj
TRANSCRIPT
Transforming Data into Knowledge: leveraging XBRL toolsANIL KUMAR BHARDWAJDIRECTOR E-GovernanceMinistry of Corporate AffairsGovernment of India
XLS
Paper format
Doc
Financialsystems
Explanatory Disclosure
Other informationsources
formats
receivers
Regulators
Proprietary methods
AnalystsInvestors Lenders Rating agencies
Challenges in Current Financial Reporting
2
XBRL - An idea whose time has come...“XBRL is ..perhaps the most revolutionary change in financial reporting
since the first general ledger”- Accounting Today
“A Breakthrough Idea”
3
XBRL stands for Extensible Business ReportingLanguage.
XBRL was developed specifically to communicateinformation between businesses and other users offinancial information, such as analysts, investors andregulators.
XBRL provides a common, electronic format forbusiness reporting.
XBRL improves the quality of data reported as there arebuild-in validation checks in the XBRL taxonomy &business rules. XBRL enables quick and accurate dataanalysis.
XBRL could also enable development of SingleReporting Platform for all Govt compliance bycompanies.
XBRL
Key BenefitsGeneration Enter data once, Render in many forms Standardized, yet extensible
Reduce costs by automating tasks
TransmissionFacilitates electronic exchange
Automates collection, immediate validation through flexible rules
ConsumptionPotentially real time informationInteractive, flows into proprietary applications
Shifts focus to analysis, facilitates judgement, quick generation of information and reports
Technology independent Open, royalty free, independent standard, low cost
Quality, Efficiency, Cost Savings5
Business Benefits from XBRL
StandardizedXBRL
Reporting
Central Corporate repository
Other Govt. Departments
Business Intelligence
Technical Scrutiny
Compliance
Improved data quality
Ease in data mining /
EWS
Ease of Exchange of standardized
data
Improved -as per
required in the
taxonomy
Ease of data availability
Beneficiaries Of XBRL Data
• Regulators• Auditors• Corporate Finance and
Control• Equity and Credit Analysts• Investment Bankers• Investors
7
8
Benefits of XBRL - Regulators
Provides a common framework of definitions and facilitates easier comparison of multiple companiesUse of standard taxonomy
Improve the accuracy, quality and transparency of corporate informationBusiness rules and inbuilt validations help to ensure data quality
Makes data more granular, more extractableData becomes machine readable and so data analysis can be automated
Early availability of processed informationQuick generation of information and reports
Collaborative nature of XBRL process provides regulators with input on the standards via enhanced communication and cooperation between regulators and respective industry organisations
9
Benefits of XBRL – Regulators contd.
Improved Early Warning System, Sophisticated Technical Scrutiny can be designed
Enables development of Single Reporting Platform for all Government compliance by companies
Automated analysisHelps to establish the flow of funds within the group and discrepancies, if any, can be flagged
Ensures cross verification of data Information submitted across companiesInformation submitted over a period by the same company
Depicting the hierarchy structure of the group companies is made easy
XBRL Implementation in MCA
10
MCA’s XBRL NotificationMinistry has mandated compulsory filing of Financial
Statements (Balance Sheet, Profit & Loss Account,Director’s Report, etc) filling in XBRL format for:◦ All Listed Companies and their Indian Subsidiaries◦ All companies with paid up capital more than Rs. 50
Million◦ All companies with turnover more than Rs. 1 Billion
Power Companies, Non Banking Finance Companies,Insurance Companies and Banking Companies wereexempted from XBRL filing in FY 2010-11.
12
XBRL – Information ContentFinancial Information
Balance Sheet and detailed Schedules of Balance sheetProfit and Loss account and detailed Schedules of P&L accountCash Flow StatementAccounting Standard disclosuresSubsidiary InformationRelated party Information
Non-Financial InformationNotes to AccountsDirectors’ ReportAuditor’s ReportAccounting Standard disclosures
XBRL Process
• Map a/c concepts with Taxonomy elements.
• Instance Document Generation. XBRL Validations, inbuilt in the software. Pre-scrutiny, Server validations by MCA. In-built Viewer to check accuracy. Separate e-Form 23AC & 23ACA for filing
XBRL attachment. Submit e-Forms on MCA portal.
13
• Notification of XBRL Rules, 2011, Taxonomy and new e-formswere issued in October 2011.
• Based upon mandatory requirements and Business Rule, MCAhas developed a validation tool to accept only complete andaccurate XBRL document on MCA21 portal. Validation toolalso contains a XBRL viewer to enable filer to see the ‘humanreadable’ format of XBRL document.
• Filings of XBRL documents started on 06.10.2011 and till datemore than 23600 companies have filed their financialstatements in XBRL. This is more than 85 % of targetcompanies.
MCA Initiatives on XBRL
15
XBRL data – Analysis by MCA Generation of alerts System based rules to identify potential problem areas
Comprehensive company pageDetailed financial information, alerts, XBRL documents, etc.
Holding - Subsidiary detailsDetailed relationship structure can be analysed
Related party transactionsAnalysis of Inter-company transactions
Group company informationIdentification of group companies based on criteria like common directors, common addresses, common auditors
23
Implementation Approach – way forward
XBRL taxonomy for C&I companies being modified for changes based on Revised Schedule VI and suggestions received from stake holdersTaxonomies being finalised/ under development
for banking, insurance, power companies and NBFCsTaxonomy also being prepared for Cost Audit
reporting
