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Journey of XBRL Reporting in India

26 Dec, 2014  Posted By Rohan Shirdhankar   Posted in XBRL Filings

The XBRL wave started in India in late 2007 when the Institute of Chartered Accounts of India, the premier accounting and statutory body, realised the critical role of Digital Business Reporting in the arena of regulatory reporting and the optimum advantage that it enjoyed in levelling the playing field. ICAI initiated the idea of using XBRL in collaboration with the different regulators in India that control the Registered companies, Banks, Insurance undertakings and Listed companies.

The four major regulators involved in the adoption of XBRL are the following entities:

  • Ministry of Corporate Affairs – the business register for companies in India
  • Reserve Bank of India -  the apex financial regulator
  • Securities and Exchange Board of India – regulates listed companies
  • Insurance Regulatory and Development Authority (IRDA) – the insurance regulator

Ministry of Corporate Affairs:

Ministry of Corporate Affairs mandated that the XBRL regulatory reporting include all companies (in phases) from 31st March 2011 who would adopt the Commercial and Industrial Taxonomy developed by ICAI. In the first year, the primary focus was on a certain class of companies who would have to file their Balance Sheet and Profit and Loss in XBRL format from the FY 2010-11 onwards.

The mandate covered around 25000 companies in Phase I. These companies were:

  • All companies listed in India and their Indian subsidiaries
  • All companies with a paid up capital of Rs. 5 crores and above, and
  • All companies with a turnover of Rs. 100 crores and above

The second year witnessed a significant change in the regulatory reporting format which radically affected the implementation of XBRL. New Schedule VI i.e. the new and improved disclosure system for Financial Statements was enforced by the Companies Act. The taxonomy architecture also underwent considerable change. Tuples were replaced by dimensions for data modelling.  At the same time the companies were required to file their cost audit report and compliance report in XBRL format. This was one of the first XBRL implementations across the globe for cost-related information. These practices are now the norm.

Reserve Bank of India

Reserve Bank of India (India’s monetary regulator) has implemented the XBRL-based regulatory filings for banks using the Internet and Indian Financial Network (INFINET).

The implementation was done in a phased manner wherein, in 2008, Phase I covering a sizeable portion of the domestic banks (seven returns) was introduced; the taxonomy was developed in the context of banking requirements including the elements pertaining to the reporting information of the Indian domestic banking system. All the scheduled banks in India were required to file using XBRL standards.

Currently RBI is working on Phase II whose objective is to harmonise the external sector’s business information, offsite surveillance and monitoring information by bringing them into the gamut of the centralised XBRL database.  The implementation of Phase II started in 2012 to include 42 returns out of nearly 225 different returns for the banks and non-bank entities.

Securities and Exchange Board of India

SEBI is in the process of implementing a Unified Platform for Electronic Reporting and Dissemination named as SUPER-D, which will be done using XBRL data standards. XBRL (eXtensible Business Reporting Language) technology based platform will be used for reporting by Listed companies, Mutual Funds and other SEBI registered intermediaries. The Mutual Fund Taxonomy is developed by SEBI.

SEBI invites all the registered Mutual Fund/Assets Management Companies to participate on voluntary basis as filers for submitting XBRL filings of the specified reports to SEBI through XBRL MF Pilot Project. These XBRL filings will be in addition to the filings under the current system. Until today, 10 Mutual funds have joined in this pilot project of SEBI and have started XBRL filing of the specified reports with SEBI on voluntary basis.

SEBI formed the XBRL Technical Advisory Committee (X-TAC) for guiding its efforts in the development of the platform, and also towards working on implementing XBRL in the filing of mutual funds.

Insurance Regulatory and Development Authority

 Insurance Regulatory and Development Authority is planning to implement XBRL. XBRL India and ICAI together have prepared Draft Templates of Taxonomies for Life and Non-Life Insurance Companies separately as the schedule for presentation of financial statements (laid down in the Insurance Act) prescribes different formats for Life and Non-Life insurance companies. Accordingly, spreadsheet templates are prepared separately for the Life and Non-life Insurance Companies.

Future of XBRL in India:

XBRL is the future of financial reporting and it offers several advantages to all kinds of financial data users.   The XBRL data can be used by the individual investors for doing their own analysis rather than using third party investment advisory service. The companies can implement XBRL in their internal reporting systems for business analysis (e.g., budgeting and production systems).

In order to provide the data freely and widely for big data analysis, the data needs to be tagged and stored in common repositories of all the regulatory bodies. This can be tagged to a common base taxonomy along with the inclusion of a set of additional specific elements to meet their reporting requirements. A strong data analytical engine can facilitate analysis of data which is stored in the government repositories.

How DataTracks can help you?

DataTracks is a global leader in preparation of financial statements in XBRL and iXBRL formats for filing with regulators. DataTracks also provides software (SaaS) and Template solutions for those who would like to convert XBRL files themselves. DataTracks prepares more than 12,000 XBRL statements annually for filing with regulators such as SEC in the United States, HMRC in the United Kingdom, Revenue in Ireland and MCA in India. DataTracks provides world-class services with its team of certified accountants experienced in US GAAP, UK GAAP, India GAAP and IFRS.

To find out more about DataTracks, visit www.datatracks.in or send an email to enquiry@datatracks.in

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