It is no new news that ICAI has been working on IFRS convergence with Indian Accounting Standards for several years now. This converged standard is termed Ind AS popularly. The Ind AS is very similar to the IFRS but has some sections carved out to match the Indian accounting environment. As a part of MCA’s road map, the first set of financial statements prepared as per Ind AS standards are set to be prepared and filed by companies with a share capital of Rupees 500 crores or more, and their holding, subsidiaries, associates and joint-venture companies. These companies, not necessarily listed in stock exchanges, must have prepared their statements in the new accounting standards by now for the year ending 31-Mar-17 with comparatives for the year ending 31-Mar-16.
A new taxonomy “ind-as” accompanies the new accounting standard. When it comes to preparing the XBRL of the financials in the new taxonomy, there could be many technical challenges for companies in creating this XBRL file.
The key challenge is the change in the taxonomy itself. All these years, such companies would have prepared XBRL file using ‘in-gaap’ taxonomy based on the Indian GAAP accounting standard. Companies and professionals must have gained an understanding and experience in working with the old taxonomy. Several XBRL software work on the basis of ‘Roll-forward’ that uses prior period XBRL tag to generate subsequent period’s XBRL document. This process will take a hit when taxonomies change. The tags in the new taxonomy are obviously different from the old. As a result, companies need to spend considerable time to select the right XBRL tag for the first period. The correctness and accuracy of the XBRL output depends on whether such XBRL files are prepared in-house or by their company secretary or by an outsourced service provider.
Secondly, the entire industry is new to the IFRS standards, on which the Ind AS is based. Be it the Company Secretaries, Chartered Accountants or Software Developers, these are some major changes that the nation hasn’t seen since the Indian Accounting Standards were framed.
At this juncture, it is important for companies to make the right choice for preparing the XBRL for filing with MCA. They could either choose to get this done using a Company Secretary, a Chartered Accountant or by using an XBRL service provider experienced in handling IFRS standards globally. We at DataTracks, handle more than 12,000 XBRL statements annually that include FTSE company accounts prepared in IFRS. Our accountants have been trained on IFRS taxonomies much before the Ind AS mandate. You could save a lot of time and effort by opting to outsource your XBRL requirements to us.
About DataTracks: DataTracks US is part of DataTracks Services Limited, leaders worldwide in preparation of financial statements in XBRL and iXBRL formats for filing with regulators. DataTracks prepares more than 12,000 XBRL statements annually for filing with regulators such as MCA in India, SEC in the United States, HMRC in the United Kingdom, Revenue in Ireland and ACRA in Singapore.