XBRL applicability on companies in India
What is XBRL
XBRL stands for “Extensible Business Reporting Language”. It is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world. It provides major benefits in the preparation, analysis, and communication of business information. This is a standardized communication language in an electronic form that is used to express, report, or file the Financial Statements of Companies incorporated under the Companies Act, 2013. It is only a method of presentation or reporting of data.
The Ministry of Corporate Affairs (MCA) provides a taxonomy for feeding all the financial as well as non-financial data of the company like balance sheet, P&L, Board Reports, CSR Reports, and other relevant taggings. XBRL is carried out through software that helps us in tagging all financial data electronically as provided in the taxonomy in a systematic manner. XBRL filing is applicable to certain specified companies as per the Companies Act, 2013.
Applicability of XBRL Financial Statements Reporting
As per the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015, the following class of companies shall file their financial statements and other documents under section 137 of the Act with the Registrar in e-form AOC-4 XBRL within 30 days of the date of AGM:
- All public companies listed in the stock exchange in India and their Indian subsidiaries.
- All companies with a turnover of Rs. 100 crores or above
- All companies with a paid-up capital of Rs. 5 crores or more
- All companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015
Moreover, the companies which have filed their financial statements in XBRL under section 137 shall continue to file their financial statements and other documents in XBRL only, though they may cease to fall under the class of companies specified above. It is important to note that non-banking financial companies, Housing Finance Companies, and Companies engaged in the business of Banking and Insurance sector are exempted from filing financial statements under these rules.
Applicability of filing XBRL Cost Audit Report
According to the Companies Act, 2013, the companies covered under the Companies (Cost Records and Audit) Rules, 2014 have to furnish the cost audit report and other applicable documents in XBRL form.
Benefits of XBRL reporting
- Increased usability of financial statement information
- Improved manner of reporting
- Meets requirements of regulators, lenders, and other users of financial information who are demanding reporting in XBRL formats.
- Automated data collection
- Reliable and Accurate
- Cost-effective and time-saving process
- Better for analytical process and thus better decision making
Manner XBRL works
An XBRL document is comprised of the taxonomy and the instance document
- Taxonomy contains description and classification of business & financial terms. Taxonomy contains all the data definitions, the basic XBRL properties, and the interrelationships amongst the concepts. Taxonomies may represent hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships among them, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user.
- Instance Document is made up of the actual facts and figures. It is a business report in an electronic format created according to the XBRL rules. XBRL instances contain the reported data with their values and “contexts”. Instance document must be linked to at least one taxonomy, which defines the contexts, labels or references.
This process involves mapping, tagging of documents that are further reviewed, verified to validate the XBRL instance document. The generated documents are further scrutinized through a tool and an XML file is created to file with ROC.
Due dates of XBRL Financial Statements Filing
- AOC-4 XBRL: 30 days from the conclusion of the AGM
- CRA-4: 30 days from the receipt of the cost audit report
For the Financial year 2020-21, the filing of financial statements in XBRL can be made till 31st December 2021.
