XBRL has been embraced by various regulatory bodies across the world. In India, The XBRL wave started in late 2007 when ICAI initiated the idea of using XBRL in collaboration with the different regulators in India that control registered companies, banks, insurance undertakings and listed companies. The Ministry of Corporate Affairs (MCA) mandated that XBRL regulatory reporting include all companies (in phases) from 2011 and released the Commercial and Industrial (C&I) taxonomy for the generation of XBRL reports as part of the AOC-4 forms. India has come a long way since the first adoption, with multiple changes and improvements to the taxonomy and the related validations.<\/p>\n\n\n\n
Despite the number of years of experience in generating XBRL reports,\nmeeting MCA requirements and staying compliant is not always as straightforward\nas it sounds. XBRL conversion can end up being a challenge in your compliance\nfunction. Everything from a slight taxonomy change to a tiny alteration in your\nstatement data can set you back, even as you edge closer to filing deadlines.<\/p>\n\n\n
The latest challenge<\/strong><\/span><\/p>\n\n\n India is moving to the Indian\nIFRS accounting standards popularly known as Ind AS. Migrating to Ind AS will\nbe complex considering that Ind AS is vastly different from the current Indian\nGAAP standards and it considerably expands the scope of regulatory reporting.<\/p>\n\n\n The hassle of keeping up<\/strong><\/span><\/p>\n\n\n In the interest of data\ntransparency, MCA requires more elaborate disclosures to be made by\ncorporations under Ind AS. The number of elements in the Ind AS taxonomy has\ngone up to 6800 from the earlier 2500. Additional disclosures such as rate\nreconciliation, tax holidays and even joint ventures are now required to be\nmade \u2013 if applicable, thereby ensuring accountable disclosures but also\nincreasing the complexity of tagging in the process.<\/p>\n\n\n\n When it comes to validation, the MCA tool now validates close to 800\nmandatory fields of information under IND AS. It also requires mandatory and\naccurate entry of unique records such as DIN\/PAN\/CIN\/SRN \u2013 as opposed to the\nacceptance of dummy records in the Indian GAAP validation rules \u2013 greatly\nincreasing validation robustness.<\/p>\n\n\n\n In any given year, there will likely be many revisions and updates to Ind\nAS taxonomy. It is expected that further updates to the validation tool will be\nreleased by MCA in due course. People converting financials to XBRL will need\nto identify validation errors, and revisit tagging decisions every time the\nrules are updated; the entire process can get rather overwhelming.<\/p>\n\n\n The burden of compliance<\/strong><\/span><\/p>\n\n\n A complex document like a\nfinancial statement takes hours of work from a slew of different people. To\nconvert all that information to an entirely new format is nothing to sneeze at.\nJust assessing and reviewing the sheer number of lines in a converted XBRL\ndocument can be daunting, let alone tagging each element and line individually.<\/p>\n\n\n\n Even after you\u2019ve done that, the document has to pass validation checks\nwith MCA\u2019s tool, and any errors the tool finds have to be resolved, before you\nvalidate your document all over again. Because automated programs can consume\nthe information in XBRL documents, the accuracy of that information is of\nparamount importance. And then comes the business of actually filing your\nreport with the regulator. All of it goes to increase the pressure on filers.<\/p>\n\n\n The constraints of expense<\/strong><\/span><\/p>\n\n\n Setting up a unit dedicated to\njust XBRL conversions might not be the most efficient solution, as you might\nnot have filing requirements all year round. But investing in training an\nexisting team is a viable option.<\/p>\n\n\n\n Allocating resources for a particular set of people to take on the XBRL\nresponsibilities on demand involves certain nuanced decisions. They need to be\nretrained regularly to accommodate revisions to the reporting standard. They\nalso need to be trained on implementing and using the tools they\u2019d need to\nfacilitate the conversions.<\/p>\n\n\n\n Even though this could potentially engage those people and make them\nunavailable for their regular duties during the period of filing, compliance is\nnot an optional undertaking. Preparing these reports ultimately helps companies\nanalyse their business processes better, and make decisions that will\nstreamline their operations. It offers the information required for insight. So,\nwhen it comes down to it, investment in compliance is boon disguised as a\nmandate.<\/p>\n\n\n An alternative<\/strong><\/span><\/p>\n\n\n Regardless of whether you\u2019ve\nbeen handling your own regulatory reporting for a long time, evaluating your\nprocess is always a good idea. In some cases, a sizeable expenditure of time,\nmoney and human resources might not be the most sensible business decision. For\nsuch instances, enlisting the services of vendors will offset most of the\nfriction associated with compliance reporting.<\/p>\n\n\n\n Because service providers employ Pratham Consultants with a singular focus, you\ncan rest assured that your compliance needs will be met without a hitch. They\nwill ensure that all latest updates are integrated in the taxonomy they use,\nthey will enforce extensive reviews, and validate their work, and even\ncoordinate with MCA so that your submissions go smoothly and are error-free.\nThis will greatly reduce the cost of compliance, relieving companies of most of\ntheir regulatory burden. A good service provider will even grant you the\nfreedom of making last-minute changes to your statements and will incorporate\nthe changes reliably in the output they provide.<\/p>\n\n\n\n Pratham Consultants is the foremost provider of regulatory reporting and\ncompliance solutions. With over 5 years of experience preparing 20,000+\ncompliance reports through out India, you can trust us to make your compliance\nreporting effortless.<\/p>\n\n\n To find out how Pratham Consultants can help with your regulatory reporting, and to experience seamless, error-free compliance with MCA regulations, write to us at info@xbrlexperts.in<\/a><\/strong><\/span> \/ xbrlexperts.in@gmail.com<\/a> <\/strong><\/span>or call (+91) 79 27540321.<\/p>","protected":false},"excerpt":{"rendered":" XBRL has been embraced by various regulatory bodies across the world. In India, The XBRL wave started in late 2007 […]<\/p>\n","protected":false},"author":1,"featured_media":4388,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,16,74],"tags":[191,218,219,294,267,287],"yoast_head":"\n