Due to globalisation of businesses, the users of financial information of the business are spread across the globe. For the purpose of making the reported financial information usable across the globe, one common reporting language XBRL was introduced. This is a universally adopted computer readable language for reporting the financial information. Using this, any financial reports can be viewed in the common format using XBRL in the prescribed format.
In order to meet universal requirements, India also adopted the practice and introduced the concept of using XBRL for Financial Reporting. As a part of this initiation, on June 7, 2011 the Ministry of Corporate Affairs (MCA) mandated the filing of the annual financial statements in XBRL format for all the financial statements prepared for the period starting from 31st March 2011 (i.e. from the financial year 2010-11).
As per the MCA circular, the following are the eligibility criteria for filing the financial statements in XBRL in the format prescribed in the Taxonomy published by the MCA.
All listed companies including their Indian subsidiaries (but excluding the overseas subsidiaries)
Companies having a paid up capital of more than Rs. 5 crore or turnover of Rs 100 crore or above.
All companies who were required to file their financial statements for FY 2010-11, using XBRL mode
In the first phase Banking, Insurance, Power, and Non-Banking Financial Companies (NBFC) are exempted from submitting financial report in XBRL Format.
Now, Indian companies can use internationally accepted reporting format – XBRL to save costs and streamline their processes for collecting and reporting financial information. Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, discover, compare and analyse data much more rapidly and efficiently if it is in XBRL format. It also assists to access non-financial information like supplier data, customer application forms, project data, employee information, regulatory submissions, and Management Information System on the company.
To assist and manage XBRL Reporting, Ministry of Corporate Affairs has set up e-governance web portal – Ministry of Corporate Affairs – XBRL (http://www.mca.gov.in/XBRL/index.html).
Companies incorporated under the Companies Act 1956, are required to file returns with the Registrar of Companies (ROC) every year. Ministry of Corporate Affairs (MCA) mandated the companies to file the annual financial statements in XBRL format for the Year 2010-11 onwards.
Assessees who are submitting their financial statements to the MCA as a part of their statutory compliance, need to (who have computerised systems in place and can) generate their financial reports in XBRL and submit to MCA (from their existing application/product/tool). Department has given the process to prepare financial reports in XBRL in the format as prescribed in a Taxonomy, and provided a tool to validate the reports and upload the reports to MCA21 system.
Steps for Filing Financial Statements in XBRL form in MCA 21 System
Create XBRL Instance Document
Map company’s financial element to corresponding element in taxonomy
Create the XBRL instance document for Balance Sheet and Profit & Loss Account
Review and verify the Instance Document
Download the XBRL Validation Tool form MCA Portal
Validate the XBRL instance document using the tool provided by the MCA department
Perform pre-scrutiny of the validated instance document through the tool (to perform pre-scrutiny, enterprises should have a working internet connection) and get it certified by any of the members of Institute of Chartered Accountants of India, Institute of Cost Accountants of India and Institute of Company Secretaries of India who are in whole time practice.
Attach the Instance Document to the Form 23AC and 23ACA
Submit/Upload the Form 23AC and Form 23ACA on the MCA portal
Note:
* XBRL Validation Tool is provided by MCA to validate the XBRL instance document generated by IT vendors / IT departments from their respective products/tools.
* Form 23AC - Form for e-filing Balance Sheet with the Registrar
* Form 23ACA - From for e-filing Profit & Loss Account with the registrar