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By a recent circular The Ministry of Corporate Affairs mandated certain companies to file their Financial Statements from the year 2010-11 in a specific format. The specific format, which is an XBRL (Extensible Business Reporting Language) format will ensure more clarity and more disclosure for Financial statements and related information filed by the Indian companies. In the current phase, the MCA (Ministry of Company Affairs) mandate will be applicable to the following companies, All Companies listed in Indian and their Indian subsidiaries, OR All Companies having a paid up capital of INR 5 Crores and above, OR All Companies having a turnover of INR 100 Crores and above.
The MCA has provided further clarifications o the following matters. Any company not filing financial statements in compliance with Schedule VI of the Companies Act is exempt. Companies such as Electricity (governed by Electricity Act), banking (governed by banking Regulation Act), Insurance Companies (governed by Insurance Act) etc. are exempt in the current phase. The Non banking subsidiaries of banking companies (Shared service centres, Mutual Fund AMC) are covered, as these companies file Schedule VI Financial Statements. The XBRL filing is required for companies whose year ending is on 31st March 2011 and thereafter. Along with the Financial Statements the filing requirements include the Directors Report, Auditors Report and basic business information.
What is XBRL?
Currently the financial statements or other information prepared in Word, Excel or HTML format can be read but cannot be automatically analysed or processed according to the users need, because information is not machine-readable and needs to be copied or keyed in before it is analysed. XBRL enables source data to be tagged electronically, making the data machinereadable. XBRL enables tagging of numbers, quantitative data and textual information.
Thus the user can automatically extract the information without the need for copy pasting or keying in. XBRL will not only ensure regulatory compliance but will also ensure that data collation process can be streamlined using electronic tags.
Key Features
1. Enables electronic transmission an exchange.
2. Fast and accurate data collection 3. Allows extending the Taxonomies and creating new ones based on business needs. However extension of core taxonomy in the first year is not allowed. 4. Software supports .DOC, .XLS, and PDF formats. 5. Review mechanisms of tagging are available. 6. Internal validation and auto tag feature is available. 7. Can be exported to excel format with complete traceability to perform review functions.